How do things depreciate?

Answer by  tamarawilhite (17883)

Things depreciate based on usage or on age. The depreciation rate for equipment depends on the type of equipment, typically 20-50% per year. Cars depreciate based on mileage driven. Capital investment in industrial production equipment depreciation rates depend on various tax breaks and should be referred to a tax professional.

Answer by  PLD (23)

The most common way to calculate depreciation is the straight line depreciation technique. Take the retail price of the item you are looking to calculate it's depreciation and divide that number by the estimated life expectancy. If the item costs $200 and last 5 years, it depreciates $40 a year.

Answer by  cynosure (376)

Things depreciate by dividing the value of the thing at purchase by a certain number of years, usually set by statute. Things may also double-depreciate - depreciate twice as quickly.

Answer by  tamarawilhite (17883)

As items are used, they wear out and become worth less. For example, a used car is worth less because it has been worn down and has less life left.

Answer by  Albertoo (4)

Things or assets (things that have a market value) are depreciated by use, per year or obsolescence. So, assets lose value every year.

Answer by  Soulcold (4)

Things (i.e. assets) lose their value with time and usage, this is depriciation. There are many ways to calculate depriciation, for tax purposes you are given the calculation method.