What is depreciation?

• Depreciation (amortisation) is the systematic allocation of the cost of a tangible (intangible) asset over its useful life
• It does NOT represent the loss in the asset’s value during the reporting period
• It does NOT involve cash flows
• Accumulated depreciation represents the total depreciation that has been charged to income statements in relation to an asset
• GAAP permit choices when transactions are being recorded, and require estimations by preparers
• Reported profit or loss figure affected by an entity’s
• Accounting policy choices

e.g. Straight line or reducing balance depreciation

• Accounting estimations

Having issues with your accounting module? SMS us at +65 9758-7925 or email: enquiry@starcresto.com