How Do You Figure Depreciation On Exercise Equipment?
There are two different types of accounting: accrual and cash. Accrual accounting is the most popular of the two, as most businesses have both cash and non-cash transactions. One common non-cash transaction is depreciation. It is treated as a real expense that both reduces the value of the asset on the balance sheet and the “reported” net income. The IRS recommends MACRS (Modified Accelerated Cost Recovery System) as the depreciation methodology for exercise equipment; however, the best methodology for use is the one that fits the natural deterioration of the exercise equipment. This may be dependent on use, rather than years. Review depreciation definition. Depreciation is the value of the wear and tear on your equipment. Not only does it allow you to expense expensive equipment over the useful life of the asset (instead of all at once), but it helps manage the value of the asset on the balance sheet. “Straight-line” depreciation writes off an equal portion of the assets value every y
