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Video instructions and help with filling out and completing Can Form 4797 Depreciation

Instructions and Help about Can Form 4797 Depreciation

Hi I'm sue Ling Hui principal and founder of cash flow gum fool in this video you learn what depreciation is and how it affects your business's finances particularly profit and cash flow depreciation applies to fixed assets on your balance sheet this group of assets is also called property plant and equipment or PPE and E for short there are items that you buy to use in your business to help generate income for more than twelve months examples of fixed assets include land and buildings plant and equipment furniture fixtures and fittings computers motor vehicles trucks and so on the word fixed doesn't mean that they're not physically movable it means they are part of your long-term business assets that's why they fall in the non current assets part of your balance sheet whether an item is a fixed asset or not depends on what is used for in the business for example a car dealership buys and sells cars to generate income these cars are bought by the business for the purpose of selling them as quickly as possible at a profit so they are part of the business's stock or inventory the dealership would also have its own cars for use by the business these cars would be part of the business's fixed assets it's the business purpose of the item that determines whether it's part of inventory or fixed assets all fixed assets have finite useful lives land is the exception depreciation is an accounting concept which spreads the cost of a fixed asset over the term of that assets useful life the length of the useful life depends on the asset for a computer it might be three years a bottling line eight years a building may be twenty years the reason for spreading...

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