Definition of Depreciable Asset
A depreciable asset has the following characteristics:
- A tangible asset (other than land)
- Has a useful life of more than a year
- Is used in the business
- The asset’s cost minus its salvage value is systematically allocated to depreciation expense over its useful life
Depreciable assets are reported on the balance sheet under the asset heading property, plant and equipment.
Examples of Depreciable Assets
Some examples of depreciable assets include the following:
- Buildings and equipment for manufacturing, warehousing, and general office functions
- Vehicles used in the business (trucks, automobiles)
- Furniture and fixtures
- Land improvements (parking lot, outdoor lighting)
