As buildings and equipment wear out or become obsolete, their value decreases. To reflect decreasing value, accountants use

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Depreciation is the accounting method used to reflect the decrease in value of buildings and equipment as they age or become outdated. Prepaid expenses and licensing are not directly related to the decrease in value of assets, while subtracting methods is not a commonly used accounting term in relation to asset valuation.

As Buildings and Equipment Wear Out or Become Obsolete, Their