Depreciação

Depreciação is an accounting method used to allocate the cost of a tangible asset over its useful life. It represents the reduction in the value of an asset due to wear and tear, obsolescence, or usage. Businesses use depreciation to account for the expense of using an asset over time, rather than expensing the entire cost in the year it was purchased. This allows for a more accurate matching of expenses with the revenues they help generate.

There are several methods of calculating depreciation, with the straight-line method being the most common. In this method, the cost of the asset is divided equally over its estimated useful life. For example, if an asset costs $10,000 and has a useful life of 5 years, the annual depreciation expense would be $2,000. Other methods include the declining balance method and the sum-of-the-years'-digits method, which recognize higher depreciation expenses in the earlier years of an asset's life.

Depreciation is an important concept for financial reporting and tax purposes. It impacts a company's net income, as depreciation expense is deducted from revenue. It also affects the book value of assets on the balance sheet. Understanding depreciation is crucial for analyzing a company's financial health and for making informed investment decisions.