Depreciation allocates the asset's cost to the periods of benefit in some systematic and rational way, and it attempts to track changes in the asset's fair value.

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Depreciation allocates the asset's cost to the periods of benefit in a systematic and rational way, but it does not attempt to track changes in the asset's fair value; instead, it represents the asset's wear and tear or obsolescence over time.

Depreciation Allocates the Asset's Cost to the Periods of Benefit