Depreciation

The portion of the cost

The portion of the cost of fixed assets charged each year as expense is named depreciation. It is a gradual and permanent decrease in the value of an

Assets like buildings

Assets like buildings, furniture and fixtures, machinery and plant, and motor vehicles that provide benefits for more than one year are fixed assets,

Depreciation arises due to normal wear

Depreciation arises due to normal wear and tear and obsolescence. Wear and tear happens through usage and passage of time. Obsolescence happens becaus

One objective is to show

One objective is to show the true financial position of the business. Another objective is to retain funds in the business for replacement of the asse

Cost of asset includes the purchase

Cost of asset includes the purchase price and all expenses incurred before first use, such as loading, carriage, installation, transportation, unloadi