<p><a href="https://www.goforma.com/small-business-accounting/31-accounting-terms-concepts-you-need-to-know" target="_blank">Depreciation</a> is the measurement of the decline in the worth of an asset. Common methods of depreciation include: <a href="https://www.accountingtools.com/articles/2017/5/15/straight-line-depreciation" target="_blank">straight line</a>, <a href="https://www.accountingtools.com/articles/2017/5/17/units-of-production-depreciation" target="_blank">units of production</a>, <a href="https://www.accountingtools.com/articles/2017/5/17/sum-of-the-years-digits-depreciation" target="_blank">sum-of-years-digits</a> and <a href="https://www.accountingtools.com/articles/2017/5/17/double-declining-balance-depreciation" target="_blank">double-declining balance</a>.</p>
Small Business Accountants
What is Depreciation?
Depreciation is the accounting technique that spreads the cost of a fixed asset over its useful economic life, matching the expense against the revenue the asset helps generate. UK businesses typically use either the straight-line method, which deducts an equal amount each year, or the reducing-balance method, which applies a fixed percentage to the written-down value. Depreciation is an accounting charge only — corporation tax relief is given separately through capital allowances.
