What is Depreciation?

감가상각

An accounting treatment in which the cost of a long-lived asset such as equipment or a building is not expensed all at once but spread over its period of use. Even if a large sum went out in the year the asset was bought, the income statement shows only a fixed share as an expense each year. Depreciation is therefore not a cash cost in that year, which is a typical reason profit and cash flow look different.