The cost of business assets can be expensed each year over the life of the asset. The expense amounts are subsequently used as a tax deduction reducing the tax liability for the business.

Because very few assets last forever, a finite number of years is calculated which is called the asset's useful life. In this article, we'll review three common methods used by business to spread out the cost of an asset. The key difference between all three methods involves the type of asset being expensed.


Source : Investopedia