The business then records depreciation expense in its financial reporting as the current period's allocation of such costs. The asset is referred to as a depreciable asset. One such cost is the cost of assets used but not immediately consumed in the activity. This expense is recognized by businesses for financial reporting and tax purposes. If an asset is expected to produce a benefit in future periods, some of these costs must be deferred rather than treated as a current expense. These may be specified by law or accounting standards, which may vary by country.
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