Depreciation isn't based on realistic estimates. They're standards issued by a governing body to try and capture some expense of the reality of depreciation.

Depreciation isn't based on realistic estimates. They're standards issued by a governing body to try and capture some expense of the reality of depreciation. For example, there's not a Dodge minivan vs Honda minivan depreciation difference, even though, if you've had both, you know one depreciates much faster than the other. In the example below, it says 5 years for furniture. Is all furniture worthless after 5 years? Of course not. There's an entire industry of centuries old antiques. "Depreciation is a non-cash business expense that is allocated and calculated over the period that an asset is useful to your business." You ask How? More info here: "Depreciation Concepts" - https://www.principlesofaccounting.com/chapter-10/depreciation-concepts/ https://www.principlesofaccounting.com/chapter-10/depreciati... example: https://www.myaccountingcourse.com/accounting-dictionary/images/depreciation-schedule-example.jpg https://www.myaccountingcourse.com/accounting-dictionary/ima... source: https://www.myaccountingcourse.com/accounting-dictionary/depreciation-schedule https://www.myaccountingcourse.com/accounting-dictionary/dep...