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Depreciation is an accounting method of allocating the cost of a tangible or physical asset over itsuseful life or life expectancy. Depreciation represents how much of an asset's value has been used up. Depreciating assets helps companies earn revenue from an asset while expensing a portion of its cost each year the asset is in use. If not taken into account, it can greatly affectprofits.

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Hi Shruti,

The decrease in monetary value of an asset over time due to use or obsolescence of that asset. The decrease is measured as depreciation. Depreciating assets helps companies earn revenue from an asset while expensing a portion of its cost each year the asset is in use.

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