Depreciation on equipment would typically be posted as an expense or loss.  For example, a $100,000 piece of equipment depreciates 10%, it's now worth $90,000 on the books...a $10,000 loss on the books.  Not ideal for stockholders looking to increase the worth of the company at the end of the year, however good for tax time because you will have a lesser overall amount to pay tax on.  I'm newer to this stuff, but that is how I understand it thus far.  Feel free to correct me or expand on the topic.