Some assets，for example，buildings，machines，vehicles，furniture，and etc.，will become completely useless at some future time.Usually this process occurs gradually;that is，a potion of the asset is used up in each year of its life，until finally it is sold and therefore is no longer useful to the entity.At that time，it is not an asset.The period of time over which a plant asset is estimated to be of service to the company is called its“service life”.When a machine or other item of plant is acquired，we do not know how long it actually will be of service.Therefore，we must estimate its service life.Since some portion of a plant asset is used up during each year of its service life，a portion of the cost of the asset is treated as an expense in each year.For example，suppose a machine is purchased at a cost of$50，000.It has an estimated service life of five years and will be worthless then.It would be reasonable to charge 1/5 as expense in each of the five years.The portion of the cost of a plant asset that is recognized as an expense during each year of its estimated service life is called“depreciation”.The$10，000 recorded as an expense during each one of the five years of services life of the machine that cost$50，000 is called“the depreciation expense”for that year.Depreciation is the process of converting the cost of an asset into expense over its service life.This process recognizes that an asset gradually loses its usefulness.Many factors are relevant to the depreciation of an asset，such as the original cost，residual value，and service life.There are many methods of a calculating the amount that is to be recorded as depreciation expense in each year of the estimated service life，such as units-of-production depreciation，straight-line depreciation，and accelerated deprecation.