Normal Depreciation

Discipline: Economics

Normal Depreciation is a method in financial accounting.

The machinery and other fixed assets of a firm lose value over time. Under the generally-accepted accounted principles, these value losses are recorded annually. Purchase cost of an asset thus gradually 'depreciated.'

For example, if the firm purchases an asset for 1000 dollars, and claims an annual depreciation value of $100, the asset will be expected to totally depreciate in 10 years.

Also see: accelerated depreciation, accumulated depreciation


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