Depreciation Expense On Income Statement is an accounting term used to represent the wearing down or diminishing of an asset over time. It is a type of non-cash expense that is recorded as an expense on a company’s income statement and is used to reduce your taxable income. Depreciation Expense is calculated to ensure that the true cost of an asset is measured over its useful life, rather than all at once when it was purchased. It allows businesses to get tax deductions for investments that provide long-term benefits.