An income statement with depreciation expense is an official financial report that summarizes a business’s revenues and expenses over a specific period, including any associated depreciation costs. Depreciation is a method of accounting for the decline in the value of tangible assets due to wear and tear, obsolescence, or other forms of usage, which can be spread out over several periods of time. This method enables businesses to deduct the cost of such assets from their taxable income, thereby increasing profits and lowering taxes. By including depreciation expense in an income statement, companies can see how much these costs are affecting their bottom line and make appropriate adjustments to ensure their financial stability.