2016 Rules for Tax Expensing and Depreciation

Tax Expensing and Depreciation

Capitalization of costs is the usual practice that any business has to follow when they buy an asset which is supposed to render service for more than a year (usually for fixed assets). In simple terms, that means the cost of the asset is written off in the balance sheet over a number of years. There are rules and laws of depreciation & amortization in place on how to do this actually and it depends on the type of asset acquired.

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