Understanding How Equipment Depreciation Affects Debt Reporting

When it comes to managing finances, especially for contractors in Utah, understanding the ins and outs of accounting can feel like navigating a maze. One crucial concept you’ll want to get a grip on is how the depreciation of equipment affects your debts and overall financial statements. Here’s the deal: when a business fails to account for equipment depreciation, it can lead to an overstatement of debts. Sound complicated? Let’s break that down in a way that makes sense.