How to prevent accumulating high depreciation.

[Axis]

Some businesses involves the use of technology in day-to-day operations of the business so that goods and services can be sold and rendered as well as the manufacturing of goods and services can be carried out. The use of technology in business involves the use of machines and equipment in carrying out day-to-day business activities. One major feature about the use of machines and equipment in business is that they will always depreciate. As a business owner you can definitely control how far your business equipments and machines depreciate.

In order to prevent high depreciation of the business machines and equipment you must make sure that they are used for the right purposes. Frequent maintenance of this machines and equipment must be carried out. Any detection of abnormalness on the machine should be definitely attend to so as not to escalate into a bigger problem.

 

[Suba]

Machinery and equipment maintenance costs are recorded differently from depreciation expenses. To record depreciation there are separate methods such as the Straight Line Method, Double Declining Balance Method, Sum of the Year Digit Method. So depreciation expenses are calculated when the machine is acquired or purchased and the method you use must be disclosed in the financial statement. So, however, you cannot prevent the accumulation of high depreciation expenses, as if you apply the straight line method then the depreciation expenses will be the same every year.

 

[saoussen5765]

Machinery and equipment maintenance costs are recorded differently from depreciation expenses. To record depreciation there are separate methods such as the Straight Line Method, Double Declining Balance Method, Sum of the Year Digit Method. So depreciation expenses are calculated when the machine is acquired or purchased and the method you use must be disclosed in the financial statement. So, however, you cannot prevent the accumulation of high depreciation expenses, as if you apply the straight line method then the depreciation expenses will be the same every year.

It could be the case however you need sometimes external financial advise to find the solution which will take a lot of time or sometimes make the wrong money decision in between.

 

[Suba]

It could be the case however you need sometimes external financial advise to find the solution which will take a lot of time or sometimes make the wrong money decision in between.

@saoussen5765, what I have described is a general accounting standard used throughout the world (such as GAAP in the United States), so in theory it is correct and can be accounted for. Machine maintenance costs are recorded separately, not combined with depreciation expenses.