Depreciation

Depreciation is a term we often talk, but do not really understand. It is an essential component of the accounting however. The depreciation is an expense that is registered at the same time and in the same period as the other accounts. Long-term operating assets that are not intended for sale within the framework of a company are called capital. Capital assets include buildings, machines, Office equipment, vehicles, computers and other equipment. It can also include items such as shelves and cabinets. Amortization refers to spread the cost of an asset to the years of his life in a company, instead of charging all of the costs of expenses in the year of the assets has been purchased. In this way, each year the equipment or assets is used is a share of the total cost. For example, cars and trucks are generally amortized over five years. The idea is to load a fraction of the total cost for in each of five years, rather than just the first year depreciation expense.

Depreciation only applies to assets that you buy, not those that you rent or rent.The depreciation is an actual expenditure, but not necessarily an expense spending cash in the year it is enregistré.La spending money is actually triggered when the asset was acquired, but recorded over a period of time.

Depreciation is different from other expenses.It is deducted from the turnover to determine profits, but the depreciation expense recorded in a reporting period requires no true cash expenditure during this période.Les depreciation expenses are part of the total cost of capital of a company that is allocated to the period to record the cost of the use of the asset to the total cost of capital of a company, période.Plus then more depreciation expense.