Depreciation

Depreciation

Depreciation means to distribute the cost of an asset with a significant useful life over a longer period than simply booking it at the date of acquisition. If you buy a new computer for SEK 40,000 that you use for several years, it would e.g. be misleading to book the entire cost at once. In the K2 accounting framework, which is used for most smaller companies, equipment are normally depreciated as a rule of thumb over a five-year period. So, in the example with the computer, you would get a cost for depreciation of SEK 8,000 every year over a five-year period.

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