Explain the purpose of recording depreciation expenses

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Reference no: EM131920648

Problem

Mr. Fogle, the President of a company that manufactures food processors ask: Why is it that I'm forced to record depreciation expense on my property when I could sell it for more tan I originally paid? I thougt that the purpose of the balance sheet is to reflect the value of my business and that the purpose of the income statement is to report the net change in value of a company. It doesn't make any sense to penalize my profits when the building hasn't lost any value. Do you agree or disagree of Mr. Fogle, explain the purpose of recording depreciation expenses.

Reference no: EM131920648

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