Over time, the assets a company owns lose value, which is known as depreciation. As the value of these assets declines over time, the depreciated amount is recorded as an expense on the balance sheet.

The goal of accounting is to produce fair and accurate statements about a company's financial performance and condition. An underlying principle of accounting is to connect the expenses that are ...

A company's net cash inflow is composed of sales, minus total fixed costs and total variable costs. Total fixed costs are those that do not fluctuate with output, and include annual depreciation costs ...

The book value of a company is the difference between that company's total assets and its total liabilities, as shown on the company's balance sheet. Book value represents the carrying value of assets ...

Daniel Liberto is a journalist with over 10 years of experience working with publications such as the Financial Times, The Independent, and Investors Chronicle. Investopedia / Eliana Rodgers ...