Depreciation

Depreciation allocates a durable asset's depreciable cost across its useful periods, recognising use of equipment in profit. The expense need not coincide with payment for purchase and normally does not create a new cash outflow.[1][2]

Support useful-life and residual-value assumptions and revisit them if expectations change. Distinguish depreciation from writing down unsaleable trading inventory: the former periodically allocates an asset's cost, while the latter recognises reduced inventory value. Neither entry should be mistaken for a fresh supplier payment.