DEPRECIATION ALLOCATION Definition

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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

PAYMENT is the satisfaction of a debt or claim; primarily money paid to fulfill an obligation.

COMPARE / COMPARISON is an audit procedure where an auditor observes similarities and differences between items such as an account from one year to the next.

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