Depreciation

Depreciation is systematic allocation of a tangible asset’s depreciable amount over its useful life.

Why this matters to income investors

A noncash charge can reduce accounting profit while representing an asset’s consumption over time.

How to use depreciation in your research

Confirm the accounting basis, share count, and period before comparing figures. Trace material changes to the company’s reported results and ask whether they reach the earnings measure it uses to explain its dividend.

This material is general education and information, not individualized investment, tax, or legal advice.