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Chapter Summary

Depreciation — Chapter Summary

ICSE · Class 11 · Accountancy

Summary of Depreciation for ICSE Class 11 Accountancy. Part of the ICSE Class 11 Accountancy syllabus. Depreciation is the gradual and permanent decrease.

63 questions40 flashcards3 formulas & key relations5 concepts

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Overview

Depreciation is the gradual and permanent decrease in the value and usefulness of a tangible fixed asset, except land. It is charged as a non-cash expense because it reduces profit without involving any cash outflow. Depreciation is not a valuation of the asset; it is an allocation of expired cost o

Key Concepts

Depreciation is the gradual and permanent

Depreciation is the gradual and permanent decrease in the value or usefulness of a tangible fixed asset, except land. It is a charge against profit an

Depreciation is permanent

Depreciation is permanent, continuous, systematic, estimated, and applicable only to tangible fixed assets. Once the book value is reduced, it cannot

Main causes include constant use

Main causes include constant use, expiry of time, obsolescence, accident, depletion, permanent fall in market price, and changes in the economic envir

Depletion is used for natural resources

Depletion is used for natural resources such as minerals, oil-wells, and quarries. Amortization is used for intangible assets such as goodwill, trade

The amount of depreciation depends on

The amount of depreciation depends on total cost of the asset, estimated scrap value, and estimated effective, commercial, or legal life, whichever is

Learning Objectives

  • To understand the meaning and characteristics of depreciation
  • To identify the main causes of depreciation
  • To distinguish depreciation from depletion, amortization, and dilapidation
  • To learn the factors used in calculating depreciation
  • To understand the Straight Line Method and the Written Down Value Method

Frequently Asked Questions

What are the important topics in Depreciation for ICSE Class 11 Accountancy?
Key topics in Depreciation include Meaning, Nature, and Characteristics of Depreciation, Causes of Depreciation, Need or Objectives of Providing Depreciation, Factors Affecting the Amount of Depreciation. Study these first, then practise questions on each for Class 11 exams.
How should I revise Depreciation for Class 11 exams?
Learn the core ideas first, then work through the 63 practice questions on Depreciation. Revise definitions regularly and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

More resources for Depreciation

All ICSE Class 11 Accountancy Chapter Summary

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