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Institute of Advanced Technological and Commercial Studies

Glossary

Depreciation: spreading an asset's cost over its life

Depreciation spreads the cost of a durable asset across the years that benefit from it. A machine paid for once serves several years: the accounts reflect that, year after year. The chosen schedule is recorded and applied from one year to the next.

A cost spread over useful life

Depreciation records the consumption of a durable asset over time. You take a base — the acquisition cost — and a useful life, then spread. Each year bears its share as an expense, and the asset's balance sheet value falls accordingly. The effect is twofold: the year's result reflects the asset's real use, and the balance sheet shows a value consistent with its condition.

  • A base, a useful life, a spread across financial years
  • The year's result bears the share matching actual use
  • The asset's balance sheet value follows its real condition

How a schedule is built

The Finance and Accounting programme has candidates build complete depreciation schedules and measure their effect on profit. The Industrial Maintenance and Energy programme approaches it through the equipment: the useful life set in the accounts is held against the technical life observed in the field.

  1. 01

    1 — The base

    The acquisition cost, commissioning included: everything needed to make the asset usable.

  2. 02

    2 — Useful life

    The number of years over which the asset renders service, judged on its real use.

  3. 03

    3 — The schedule

    The chosen spread, year by year, recorded and applied consistently.

  4. 04

    4 — The effect

    An expense in the income statement, an adjusted value on the balance sheet: both statements stay consistent.

Programmes that practise it

2 catalogue programmes put “Depreciation” to work: 240 credits and 2400 taught hours in total. The official rule holds throughout — one credit stands for 25 hours of work, 10 of them taught. Every line below is recomputed from the programme page: level, duration, credits, taught volume and fees in Guinean francs appear exactly as filed in the official catalogue.

ProgrammeLevelDurationVolumeFees
Finance and Accounting programme — Bac+5 levelMaster's degree2 years120 credits · 1200 taught hours6 800 000 GNF per year
Industrial Maintenance and EnergyBachelor's degree2 years120 credits · 1200 taught hours5 400 000 GNF per year
Depreciation: spreading an asset's cost over its life — Glossary | IHETC — IHETC