Term · Bookkeeping
Depreciation
Spreading the cost of an investment, such as a laptop or van, over the years you use it. This way, large purchases do not weigh on your profit in a single year.
You depreciate business assets that last longer than a year and cost more than €450. If a van costs €30,000 and you use it for five years, with a residual value of €5,000, you depreciate €5,000 a year.
Tax limits apply to the depreciation of goodwill and buildings. Land is not depreciated.