What is DEPRECIATION?

Learn about depreciation.
Understand what it means and why it's important.
Depreciation is an expense in your Profit and Loss Account (or Income Statement), so it affects your profit.
Depreciation also reduces the book value of your assets in the Balance Sheet, so it affects your financial position.

This includes:
- What is depreciation?
- How depreciation affects your financial statements
- Comparing different methods of depreciation: straight line method vs diminishing value (reducing balance) method
- How to run depreciation in Xero