Depreciation is essentially an accounting transaction that spreads out the tax benefits of a business expense over the lifetime of the asset purchased.
Depreciation is considered a non-cash expense, since it is simply an ongoing charge to the carrying amount of a fixed asset, designed to reduce the recorded cost of the asset over its useful life.
Depreciation is the practice of expensing the cost of a capitalized asset over time. Many assets cannot be sold later to fully recover the business's cost.
Publication 946 (2020), How To Depreciate Property
In accountancy, depreciation refers to two aspects of the same concept: first, the actual decrease of fair value of an asset, such as the decrease in value of factory equipment each year as it is used…