Equipment depreciation illustrated - HxGN EAM - Version 11.07.01 - Feature Briefs - Hexagon

HxGN EAM Equipment Depreciation

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HxGN EAM Version

Buildings, machinery, equipment, furniture, fixtures, computers, outdoor lighting, parking lots, cars, and trucks are all examples of assets that will last for more than one year but will not last indefinitely. During each accounting period (year, quarter, month, etc.) a portion of the cost of these assets is being used up. The portion being used up is reported as Depreciation Expense on the income statement. In effect, depreciation is the transfer of a portion of the asset's cost from the balance sheet to the income statement during each year of the asset's life.

EAM provides several depreciation methods for allocating an equipment asset’s cost to depreciation expense. These depreciation methods are Straight Line, Double Declining Balance, Sum of Years Digits and Units of Output.