Depreciation is the process of allocating the cost of an item of property, plant and equipment to expense in the accounting periods benefiting from its use.

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Depreciation is the gradual decrease in the value of an asset over its useful life. As the asset is used or becomes obsolete, a portion of its cost is allocated as an expense on the income statement. The purpose of depreciation is to match the cost of the asset with the revenue it generates over time.

Depreciation Is the Process of Allocating the Cost of an Item