What is depreciation in accountancy?
In accountancy, depreciation refers to the systematic allocation of an asset's cost over its useful life. It matters because the same idea reappears across many later topics, so building a clear mental picture of it early saves a lot of time.
How to approach it step by step
To work with depreciation confidently, choose straight line or written down value, then apply the rate each period. LetMeTeach draws this out live on screen while explaining it aloud, so you watch each part appear instead of decoding a static block of text. You can interrupt at any point and ask for the same idea again in simpler words, in another language, or with a different example.
Worked example
An asset costing 100,000 with a 10 year life depreciates 10,000 a year on the straight line method.
The mistake most learners make
Treating depreciation as a cash outflow.
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