Depreciation Journal Entries are a form of accounting that reflects the gradual reduction in value of an asset. It’s a way of spreading out the cost of buying an expensive asset over its useful life. By recording depreciation expenses, businesses can accurately and realistically measure their profits and losses while still keeping track of the physical assets they possess and use. Essentially, it means that businesses won’t have to account for the full price of an asset all at once when they purchase it, but rather they can spread the cost over time – taking into account the changing value of their asset as it ages.