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accelerated depreciation method

method of depreciation that provides higher depreciation costs early in the life of an asset when repairs and maintenance are often low and lower depreciation in later years


type of repair that changes an asset's original use to a new or different use


process of spreading or allocating a cost or payment over a period of time


type of repair that improves an asset so that its condition is better than its original condition

book value

fixed asset original cost less accumulated depreciation

capital expenditure

cost incurred to purchase a fixed asset, enhance an existing fixed asset, or extend its useful life, benefiting future periods


exclusive publishing rights for performing arts, literary works, visual arts, digital content, photographs, and motion pictures


process of transferring the cost of a natural resource to an expense as it is consumed

depreciable cost

cost of a fixed asset less its residual value


process of allocating the cost of a fixed asset to an expense account over the life of the asset

double declining balance method

accelerated depreciation method that is a multiple of the straight-line method, most commonly twice the straight-line method

expected useful life

number of years a fixed asset is expected to remain in service for the company

fixed asset

tangible non-current asset used in the normal course of business


premium paid over the market value of net assets (market value of identifiable assets minus market value of identifiable liabilities) in a completed acquisition

initial cost

purchase price plus all costs required to get the asset ready for its intended purpose or use

intangible asset

asset that is nonphysical and provides business entities with long-term rights, privileges, or competitive advantages


exclusive right granted to use a process to produce or sell an item

residual value

anticipated value of a fixed asset at the end of its useful life


type of repair that renovates an older asset to a like-new condition

straight-line depreciation method

depreciation method that provides a constant amount of depreciation expense over the life of the fixed asset


unique symbol, name, phrase, or jingle used to identify a business entity, product, or service

units-of-activity method

depreciation method that bases depreciation expenses on the level of activity in a particular period