Everything you need to know about depreciable assets
Posted: Wed Feb 12, 2025 3:21 am
Depreciation is a method that allows the acquisition cost of depreciable assets to be spread over their useful life, thus avoiding an excessive financial burden at the time of purchase. Which assets can be depreciated? What is the appropriate depreciation period for each asset? Which calculation method should be used? We have all the answers to your questions. Follow us!
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In summary:
Depreciable assets are assets recorded on the balance sheet, used on a long-term basis by the company for more than one year, the value of which depreciates over time;
They include tangible fixed assets (equipment, vehicles, buildings) and intangible assets (software, patents, brands);
Stocks, land, and financial investments are not depreciable;
The depreciation period depends on the type of asset. Standard periods are set by the tax authorities;
The calculation of depreciation will depend on the method applied: linear, decreasing, variable or exceptional.
What is a depreciable asset?
A depreciable asset is a fixed asset acquired by a company, recorded on the balance sheet , whose value depreciates over time due to wear and tear, obsolescence or use.
In accounting, depreciation is the mechanism that allows the acquisition cost of this asset to be spread over several accounting periods, corresponding to its useful life. This approach allows for a more faithful reflection of the consumption of resources over the years and avoids an excessive financial burden in the acquisition period.
What are depreciable assets? Tangible fixed assets
Tangible fixed assets are physical assets used in the daily operations of the business. They include:
Equipment : Machines, tools, and production equipment that are used to manufacture goods or provide services;
Vehicles : Cars, trucks, and other means of transportation necessary for the company's activity;
Buildings : Buildings and infrastructure used for business operations, storage, or as offices;
Furniture : Office equipment, computers and other furniture items used in the company premises.
Intangible assets
Intangible assets are non-physical assets that have significant economic value to the company. They include:
Software : Computer programs acquired or developed for the needs of the company;
Patents : Exclusive rights granted for a particular invention or process.
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Managing your business is child's play with Indy
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In summary:
Depreciable assets are assets recorded on the balance sheet, used on a long-term basis by the company for more than one year, the value of which depreciates over time;
They include tangible fixed assets (equipment, vehicles, buildings) and intangible assets (software, patents, brands);
Stocks, land, and financial investments are not depreciable;
The depreciation period depends on the type of asset. Standard periods are set by the tax authorities;
The calculation of depreciation will depend on the method applied: linear, decreasing, variable or exceptional.
What is a depreciable asset?
A depreciable asset is a fixed asset acquired by a company, recorded on the balance sheet , whose value depreciates over time due to wear and tear, obsolescence or use.
In accounting, depreciation is the mechanism that allows the acquisition cost of this asset to be spread over several accounting periods, corresponding to its useful life. This approach allows for a more faithful reflection of the consumption of resources over the years and avoids an excessive financial burden in the acquisition period.
What are depreciable assets? Tangible fixed assets
Tangible fixed assets are physical assets used in the daily operations of the business. They include:
Equipment : Machines, tools, and production equipment that are used to manufacture goods or provide services;
Vehicles : Cars, trucks, and other means of transportation necessary for the company's activity;
Buildings : Buildings and infrastructure used for business operations, storage, or as offices;
Furniture : Office equipment, computers and other furniture items used in the company premises.
Intangible assets
Intangible assets are non-physical assets that have significant economic value to the company. They include:
Software : Computer programs acquired or developed for the needs of the company;
Patents : Exclusive rights granted for a particular invention or process.