#FOOD PROCESSING METHODS MILLING SOFTWARE#

Gives a more consistent representation of a company’s financials from year to yearĪssets can lose value over time for a variety of reasons.Ī more traditional physical asset, such as a piece of equipment or machinery used to manufacture products, breaks down over time as its parts get old-and must eventually be replaced.Įven a non-physical, or intangible asset, can lose value over time-a brand may become less popular with younger consumers, or a proprietary technology may lose value as emerging tech takes its place.Īs such, companies need to reflect this reality in their financials, and so they depreciate the asset on the balance sheet over time.

Represents the (real) depreciation (or loss) in value of an asset over time.

The deprecation of an asset does two things: You may also hear the word depreciation incorporated with amortization, which is essentially the same thing as depreciation but for intangible assets. What is Asset Depreciation – The Basicsĭepreciation, in its most simplest explanation, is the spreading out of the cost of a big expense for a business.

#FOOD PROCESSING METHODS MILLING SOFTWARE#

I started with the basics which can provide a quick refresher, and added some important peculiarities around software that you won’t find with other assets. This is a jam packed post, particularly if you’re not well versed in basic accounting concepts like depreciation. Average Computer Software Depreciation Schedule of the S&P 500.

So, computer software depreciation fits in with other types of discretionary GAAP determinations, as another consideration in Plant, Property, and Equipment (PPE) accounting. Not all assets are the exact same, and many have different utility and length of usefulness (or useful life). However, this isn’t necessarily a bad thing.

Food processing methods milling