(v1110.00) Depreciation Expense

An accounting convention designed to expense the historical cost of a tangible asset over its useful life. Depreciation expense does not necessarily reflect the decline in the market value of an asset.

Many companies show depreciation expense on the Income Statement, the Cash Flow Statement, and Funds Flow Statement. Other companies include depreciation expense in COGS (v1040) and/or SG&A Expense (v1080) and do not report depreciation expense on the Income Statement.

Because the depreciation expense on the Funds Flow Statement must equal all depreciation expenses in Net Income (v1750), Depreciation Expense (Funds) (v2190.01) must equal or exceed Depreciation Expenses (v1110.00) reported separately on the Income Statement.

To enter Depreciation Expense (v1110.00) for the Income Statement:

Depreciation Expense (v1110.00) uses a Freeform forecast method that calculates the Depreciation Expense (v1110.00) in forecast periods as equal to Depreciation Expense (Funds) (v2190.01). To allocate a portion of Depreciation Expense (Funds) (v2190.01) to other Income Statement items, change the forecast method to Percent of Another Account, using Depreciation Expense: (Funds) (v2190.01) as the Associated Account. Enter the unallocated percentage (0-99%) in Depreciation Expense (v1110.00). If the percentage entered in Depreciation Expense (v1110.00) is less than 100%, it is assumed that the remaining amount for Depreciation Expense (Funds) (v2190.01) have been included in other accounts on the Income Statement, such as SG&A Expense (v1080) or COGS (v1040).

To enter total Depreciation Expense (Funds) (v2190.01), see (v5745.00) Economic Profit NOPAT .