depreciation

The concept that an asset's value decreases over its lifetime, as it is becomes less able to provide service. Since an item has a specific depreciation period (service life), accounting practices call for expensing the cost of an item over its depreciation period, such that a portion of its cost becomes an expense for each of the months in the depreciation period. For example, if an item has a depreciation period of 10 years (120 months), and costs $12,000.00, depreciation principles call for debiting $100.00 as a depreciation expense for each month of the 120 months.

Archibus works with three methods of calculating depreciation for assets: straight-line depreciation, sum-of-years-digits depreciation, and double-declining balance depreciation. Additionally, if an asset increases in value, you can calculate appreciation with the percentage method.