A depreciable asset is property that provides an economic benefit for more than one reporting period. A capitalization limit may also be applied to keep lower-cost purchases from being classified as depreciable assets. A qualifying asset is initially classified as an asset, after which its cost is gradually depreciated over time to reduce its book value. Examples of the classifications of assets used to record depreciable assets are:
- Computers and software
- Furniture and fixtures
The time period over which an asset is depreciated depends on its classification. Land is not depreciated at all, since it is considered to have an infinite life span.