Asset Depreciation

When acquiring property, a business spends money. However, the purchase of high-value assets can distort your financial reporting.

For example, if you immediately write off the entire cost of a purchased asset, the Profit and Loss (P&L) report will show a significant loss — even though the business continues to operate and generate income.

To avoid distorting financial statements, depreciation is applied. This is a method of gradually accounting for the value of property or equipment as business expenses.

In the Fixed Assets module, when adding assets, you can immediately specify the depreciation amount and period. Depreciation expenses will be reflected in the P&L report.