Glossary
Depreciation
A depreciation is a cost without a payment. The money went out when the asset was bought; the depreciation is the fraction of the price that belongs to this month or this year. It makes the income statement true, because the cost lands in the periods the asset is used. In Danish it is an afskrivning.
Updated 21 October 2026
What is depreciation?
The usual method is straight-line depreciation: the cost divided by the lifetime, the same amount every period. A computer for 12,000 kr. with a lifetime of three years is depreciated by 4,000 kr. a year, or 333.33 kr. a month. The book value is the cost less the depreciation made so far; after eighteen months it is 6,000 kr.
The depreciation is booked as a voucher: the depreciation cost account is debited, and the asset's account is credited, so its value in the balance sheet falls. Depreciation carries no VAT, because the VAT was taken at the purchase. Tax depreciation follows its own rules and can differ from the accounting depreciation; the annual report shows the accounting one.
Depreciation in Veneti
In Veneti the depreciations arrive by themselves once Assets is switched on: every month a voucher of the type Depreciation is placed in the journal for each asset, calculated from its lifetime, and you book it with everything else. The asset's account is credited, so the account's balance for the asset is its book value; the cost account is Venetis suggestion, and you can change it, the date and the text before you book.
The asset register under Reporting shows each asset's depreciations and book value, and an asset can be written off at once or marked as sold, after which the depreciations stop. The term behind it: Fixed asset.
Related terms
- Fixed asset: what is depreciated.
- Income statement: where the depreciation lands as a cost.
- Cash flow statement: where the depreciation is added back, because it is not a payment.