Depreciation: Starting with the Basics
Depreciation is a term you’ve probably heard your accountant use fairly often; understanding its full meaning and financial implications is important to make strategic management decisions. The concept of depreciation is not as daunting as one would think. This article will provide details to give you more confidence when discussing and selecting depreciation for your operation. An Example – Tractor Purchase When you purchase a tractor (or other depreciable property), it starts to lose value as it ages. When the tractor is sold, it likely brings less in return than the original purchase price. Depreciation is a way to [...]
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