Depreciation, Provisions and Reserves
CBSE · Class 11 · Accountancy
Complete topic list for Depreciation, Provisions and Reserves in CBSE Class 11 Accountancy. Key concepts, sub-topics, and what to focus on for board exams.
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Topics in Depreciation, Provisions and Reserves
1. Meaning and Nature of Depreciation
- Depreciation means decline in the value of a fixed asset due to use, passage of time, or obsolescence.
- It is a permanent, continuing and gradual shrinkage in the book value of fixed assets.
- Depreciation is an expired cost charged against revenue.
2. Depletion, Amortisation and Causes of Depreciation
- Depletion is used for natural resources like mines and quarries.
- Depreciation relates to the usage of an asset, while depletion relates to exhaustion of economic resources.
- Amortisation is writing-off the cost of intangible assets like patents, copyright, trade marks, franchises and goodwill.
3. Need for Charging Depreciation and Factors Affecting It
- Depreciation helps in matching costs with revenue.
- It is charged like salary, carriage and postage.
- It is required to compute true profit or loss.
4. Methods of Calculating Depreciation
- Only two methods of depreciation are mandated by law and enforced by professional accounting practice in India: straight line method and written down value method.
- Other methods include annuity method, depreciation fund method, insurance policy method, sum of years digit method and double declining method.
- The chosen method should be applied consistently from period to period.
Key Concepts
Central concept: Depreciation, Provisions and Reserves in Financial Accounting
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Sources & Official References
- NCERT Official — ncert.nic.in
- CBSE Academic — cbseacademic.nic.in
- CBSE Official — cbse.gov.in
- National Education Policy 2020 — education.gov.in
Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.
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