We're all familiar with the idea that when we buy a car, or a television, or any other large item, it depreciates — it becomes worth a bit less every year. When you buy larger assets for your business, you need to keep track of the value of the asset, which is a bit less each year, and also account for the depreciation, which is part of your business expenses.
This article explains how to account for depreciation. It's important to be aware, however, that how much of the value of each asset you can depreciate and set off as an expense for calculating taxable profits each year is governed by the tax rules in your particular jurisdiction, so be ready to talk to an accountant or spend some time researching the rules where you are to ensure you depreciate the correct amount.
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