BizSugar.com › Marketing › How to Use Various Methods of Asset Depreciation

When a business buys a fixed asset, a long-term asset used in the production of inventory, which is then sold for a profit, it commits to keeping the asset on their books and in their tax returns for years to come. The cost of the asset must be allocated over the course of its useful life, since it continues to generate value for the company up until the point it is disposed. Asset Depreciation is the means for businesses to write off the cost over that time.