Depreciation A noncash expense reflecting wear and tear of property used as part of a trade or business or held for the production of income. Usually, the cost of an asset, less an appropriate salvage value, is "written off" over its useful life by periodically reducing the book value of the asset with an increase to accumulated depreciation and charging an equal and offsetting amount as depreciation expense. Depreciation used for book purposes may be different from the amounts allowed on tax statements.
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