Depreciation is the process of allocating a long-lived asset's cost over its productive life.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time due to use and wear.

Long-Lived Asset

Assets with a useful life extending beyond one year, typically including property, plant, and equipment, and used in the operation of a business.

Productive Life

The expected period during which an asset is able to provide economic benefits or contribute to revenue generation.

Gain an understanding of the diverse approaches to depreciation, the process of computing them, and their influence on financial documentation.

Verified Answer

Final Answer :

True

Explanation :

Depreciation is the systematic allocation of the cost of a long-lived asset over its useful life in a rational and systematic manner.

Learning Objectives

Gain an understanding of the diverse approaches to depreciation, the process of computing them, and their influence on financial documentation.