When financed equipment becomes obsolete during a loan — whether because new technology has leapfrogged the existing design or regulations have made the equipment unusable — the borrower remains responsible for the remaining loan balance. This situation also triggers an impairment test that compares the estimated future cash flows the asset can generate against the asset’s current value on… Read more »
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As a small business owner, you have the ability to depreciate assets differently depending on your financial situation and business goals based on IRS publication 946 as some may give you more cash flow now and others provide it over multiple years. Two examples of this are 100% bonus and straight line depreciation. 100% bonus… Read more »
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What is B2B and B2C, and how can you apply these strategies to your business? Learn more.
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Cash flow is the movement of actual dollars into and out of a business and does not include non-cash items. One example is that accounts receivable counts toward revenue, but you don’t receive any cash. Another is depreciation, which is an expense that you subtract from revenue before you get profit, but you don’t actually… Read more »
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Yes, depreciation is an operating expense when you use the asset you’re depreciating for your core business operations according to Generally Accepted Accounting Principles (GAAP). Your core business is how you regularly generate revenue as opposed to other activities that create revenue on the side or sporadically. Depreciation can be a non-operating expense when the… Read more »
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