Calculating depreciation expense is a necessary process in business operations, serving to spread the costs associated with long-term assets over the period in which they are used for company gain. This encourages responsible decision-making when purchasing or owning items that will last more than one year, and gives businesses accurate information as far as their profitability goes. In order to calculate depreciation expense, there are certain formulas and timeframes companies can use to spread out their expenses accurately. This process reduces the likelihood of overstated costs and allows businesses to make more informed decisions regarding their resources and investments.