Depreciation


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Depreciation

Description: <p>The process of deducting some portion of the cost of a property over time as an expense against income. The purpose is to reflect the fact that the property is becoming less valuable and will eventually require replacement.</p> <p>Depreciation is also used in appraisals, to reflect the current value of a building and improvements.</p> <p>There are a few methods for calculating depreciation. The most common method is <b>straight line method<b>, in which an equal amount is depreciated or deducted each year until the property or improvement has been fully depreciated.</p> <p>Another method is the <b>double declining balance</b> method. In this method, more is deducted in the first year than with the straight line method.</p>



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