What is a depreciation schedule?

A depreciation schedule is a record tracking each depreciable asset, its cost, its placed-in-service date, its useful life, its depreciation method, and its accumulated depreciation over time. For professional service firms, depreciation schedules support tax deductions and accurate financial reporting of fixed assets.

Key characteristics

• Tracks all depreciable assets

• Records original cost and date

• Shows the depreciation method

• Calculates annual depreciation

• Tracks accumulated depreciation

• Supports tax return preparation

Why it matters for professional service firms

Accurate depreciation schedules ensure proper expense recognition and tax deductions. Missing assets mean missed deductions; errors create audit issues. Professional service firms should maintain current depreciation schedules and reconcile them to the general ledger.

Real-world example

Tom's depreciation schedule tracked: computer equipment $12,000 (5-year life, $2,400 annual depreciation), office furniture $8,000 (7-year life, $1,143 annual), leasehold improvements $15,000 (15-year life, $1,000 annual)—total annual depreciation: $4,543. Schedule provided details for tax return Form 4562 and supported the balance sheet fixed asset balances.