How does depreciation affect a company s financ... - SS1 Accounting Meaning of Depreciation Question
How does depreciation affect a company's financial statements?
Depreciation reduces the value of a fixed asset on the company's balance sheet, which in turn reduces the company's taxable income. This means that the company pays less in taxes and has a lower net income. Additionally, depreciation is a non-cash expense that does not affect the company's cash flow.
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