Over time, the assets a company owns lose value, which is known as depreciation. As the value of these assets declines over time, the depreciated amount is recorded as an expense on the balance sheet.

Peter Gratton, Ph.D., is a New Orleans-based editor and professor with over 20 years of experience in investing, economics, and public policy. Peter began covering markets at Multex (Reuters) and has ...

Assets like equipment, vehicles and furniture lose value as they age. Parts wear out and pieces break, eventually requiring repair or replacement. Depreciation helps companies account for the ...