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