# depreciation

depreciation a reduction in the value of an asset over time in particular to wear and tear.

## Depreciation in context with Income Statement and Balance sheet

Depreciation is one of the basic accounting terms that is applied to the degree of wear and tear that happens to a firm’s assets. With the help of depreciation accountants can calculate whether it is time to replace the assets or not. It also

## Diminishing Balance Method of Depreciation

Diminishing Balance Method of Depreciation: Learning Objectives: Define, explain and give example of the diminishing balance method/written down value method/reducing installment method? What are advantages and disadvantages of diminishing balance method? Definition and Explanation: Diminishing balance method is also known as written down value

## Need for Depreciation

Need for Depreciation: Learning Objectives: Why does the need for calculating and charging depreciation arise. The Need for depreciation arises for the following reasons: Ascertainment of True Profit or Loss: Depreciation is a loss. So Unless it is considered like all other expenses and

## Difference Between Depreciation and Fluctuation

Difference Between Depreciation and Fluctuation: Learning Objectives: What is the difference between depreciation and fluctuation?. Depreciation of asset and fluctuation in its market value are not the same. For example, a businessman purchase a machine the life of which is estimated at 10 years

## Annuity Method of Depreciation

Annuity Method of Depreciation: Learning Objectives: What is annuity method of depreciation? Where is it adopted? According to this method, the purchase of the asset concerned is considered an investment of capital, earning interest at certain rate. The cost of the asset and also

## Depreciation of Various Assets

Depreciation of Various Assets: Learning Objectives: How should the depreciation on various assets be calculated?. We discuss below the problem of depreciating some given assets. Freehold Land and Building: It means that land and building which has been purchased out right and not on

## Depreciation, Depletion and Amortization

Depreciation, Depletion and Amortization: Learning Objectives: What is the difference among depreciation, depletion, and amortization. Depreciation: The term depreciation is used with reference to tangible fixed assets because the permanent continuing and gradual fall in book value is possible only in the case of

## Depletion Method of Depreciation

Depletion Method of Depreciation: Learning Objectives: What is depletion method of depreciation? Explain with example. Depletion method of depreciation is especially suited to mines, quarries, sand pits, etc. According to it the cost of the asset is divided by the total workable deposits. In

## Accounting For Depreciation

Accounting For Depreciation Learning Objectives: Define and explain the term “depreciation”. Why does depreciation calculated and charged? What are the different methods for providing depreciation? Definition and Explanation of Depreciation: The value of assets gradually reduces on account of use. Such reduction in value

## Fixed Installment Method or Straight Line Method or Original Cost Method of Depreciation

Fixed Installment Method or Straight Line Method or Original Cost Method of Depreciation: Learning Objectives: Define, explain and give example of fixed installment or straight line or original cost method. What are the advantages and disadvantages of of using this method? Fixed installment method

## Basic Factors of Determination of Depreciation

Basic Factors of Determination of Depreciation: Learning Objectives: What are the basic factors of depreciation determination? For calculation depreciation the basic factors are: The original cost of the asset. The estimated working life of the asset or the number of years the asset is

## Definition, Explanation and Characteristics of “Depreciation” or “Accounting Depreciation

Definition, Explanation and Characteristics of “Depreciation” or “Accounting Depreciation”: Learning Objectives: Define and explain the terms “depreciation” or “accounting depreciation”. The value of assets gradually reduces on account of use. Such reduction in value is known as depreciation. Different authors have given different definitions