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Glossary · Bookkeeping & QuickBooks term

Depreciation

The accounting method that spreads the cost of a long-lived asset across the years it’s used, rather than expensing it all in the year of purchase — a non-cash expense that lowers profit without touching cash.

By TechBrot · Published · Updated

§ 01 · In plain terms

What depreciation means.

Depreciation is the accounting method of allocating the cost of a tangible long-lived asset — equipment, vehicles, machinery — over the years it is expected to be used, instead of recording the whole cost as an expense in the year you bought it. Each period takes a portion as a depreciation expense.

It is a non-cash expense: it reduces reported profit and the asset’s book value (via accumulated depreciation on the balance sheet), but no cash leaves the business when it is recorded — the cash left when you bought the asset.

§ 02 · Why it matters

Where it shows up — and where the CPA takes over.

Depreciation matters because it affects both profit (a recurring expense on the P&L) and the balance sheet (asset value declining over time). Booked correctly, it keeps both statements accurate; ignored, it overstates both profit and asset value.

Importantly, book depreciation and tax depreciation are not the same. The tax rules — Section 179 expensing, bonus depreciation, MACRS schedules — are the domain of your CPA or EA, who sets the tax method and amounts. TechBrot records depreciation in your books to match what your tax professional directs; we keep the books right, they make the tax call.

Put it to work

Fixed assets not on the books correctly?

A QuickBooks ProAdvisor sets up asset and depreciation tracking in your books to match your CPA’s schedule — written fixed-fee scope.

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  2. 02We look at the file if we need to. You add us as an accountant user in your own QuickBooks file, and you can remove us at any time. If the file cannot be priced without working inside it, we say so and propose the paid diagnostic, whose fee is credited in full against the cleanup.
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