Kishore V, SME, and ACW at Edumarz.

  • Depreciation is defined as a permanent, ongoing, and progressive decrease in the book value of fixed assets. 

  • It is based on the cost of assets utilized in a firm rather than the market worth of those assets. 

  • The Institute of Cost and Management Accounting in London (ICMA) “Depreciation is the decrease in the intrinsic worth of an asset.” result of use and/or the passage of time.” 

  • The Institute of Chartered Accountants produced Accounting Standard-6. The Institute of Chartered Accountants of India (ICAI) defines depreciation as “a measure of wear and tear, consumption, and inflation.” 

  • Or any other decline in the value of a depreciable asset caused by usage, the passage of time, or other factors obsolescence as a result of technological advancements and market changes

  • Depreciation is assigned such that a reasonable proportion of depreciable amount is charged in each accounting period throughout the expected useful life of the asset. 

  • Depreciation includes amortisation.

  • Machines, plants, furniture, buildings, computers, vehicles, vans, equipment, and so on are examples of depreciable assets

  • Furthermore, depreciation is the allocation of a ‘depreciable amount,’ which is the “historical cost,” or other equivalents. 

  • The sum replaced for the historical cost less the projected salvage value

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