DEPRECIATION ALLOCATION Definition

Bookmark and Share

DEPRECIATION ALLOCATION is the allocation of the cost of capital expenditures so that revenue is matched with expenses for items that will last more than one year (land is not depreciable). The methodology is to allocate plant and equipment cost to expense through the use of accelerated, straight line and units of production amortization methods; as well as the disposal of assets; and, repairs and betterments to assets.

Learn new Accounting Terms

NON-CASH EXPENSE is that expense which is recognized within the financial statements without actual cash being disbursed (e.g., depreciation, amortization, and write-offs).

NET OPERATING LOSS (NOL) is experienced by a business when business deductions exceed business income for the fiscal year. For income tax purposes, a net operating loss can be used to offset income in a prior year, or a taxpayer can elect to forego the carry back and carry the net operating loss forward.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.