 Welcome to Unit 6 of Sailor.org's Introduction to Financial Accounting. This unit is divided into two subunits and takes three hours to complete. In this unit, we'll delve into the transactions related to what we call tangible assets. Tangible assets are items that have physical presence and are either owned or leased by the company like warehouse space, retail stores, land, or machinery. For some companies like manufacturing companies, tangible assets are extremely important to the value of the company and essential to operations. After all, without a factory or machinery, how can a manufacturing company produce the goods that it will then sell to other businesses or to consumers? Tangible assets have to be recorded in accordance with financial accounting principles similar to the way that purchasing inventory or receiving cash payments is handled. Tangible assets generally add value to a company. However, with natural wear and tear and usage, most tangible assets tend to lose value. That's why you buy a car for $25,000 and five years later, you trade it in and only get $5,000 for the same car. It loses value over time. This explains why sometimes tangible assets are even sold to generate cash after they have outlived their useful life. In this unit, you will learn the appropriate actions that a company must take when a tangible asset loses its value or when a tangible asset is sold. You'll also learn about the concept of depreciation. The value lost from a tangible asset is called the depreciation. So in the example of the car we talked about before, depreciation explains why the car you bought for $25,000 is now only worth $5,000. Now there are several ways to determine the amount of value lost each year from a tangible asset. Be sure to pay close attention to the calculation and recording of depreciation and tangible asset losses in this unit. This unit has great practice problems to help you conquer the topics discussed in this unit. Now we're more than halfway through the course. Keep up the great work.