whatis the meaning of Depreciation? and why it will charge?
Answers were Sorted based on User's Feedback
Answer / pradeep
depreciation mean decrease in the assets value becose of
uses of assets the value of assets has been decrease .it
will charge for knowing the real value of assets at present
for calculate of Income.
Is This Answer Correct ? | 7 Yes | 1 No |
Answer / anil kumar t.m
Depreciation is decrease in the value of Assets due to wear
and tear of particular Assets.
Formula = Asset/no of year used*365
Is This Answer Correct ? | 5 Yes | 3 No |
Answer / kuldip jagdish vaswani
Depreciation is an Measure of Wearing Out, Consumption and Other Loss in the Value of the Fixed Asset arising from Use Or Passage of the Time. Depreciation is an Nothing but Distribution of Total Depreciable Value of Fixed Assets over useful life of Fixed Assets. ( AS 6 - Depreciation of Indian Accounting Standards)
Depreciable Value of Fixed Assets = Total Cost of Fixed Assets Less Scrap Value
Depreciation is Been Charged for the Following Above Reasons
a) Correct Income Measurement : Depreciation should be charged fro proper estimation of Periodic Profit or Loss
b) True Financial Position : Value of the Fixed Assets should be Adjusted for Depreciation Charged in order to Depict Actual Financial Position
c) In Order to Ascertain Correct Cost of the Production
d) It Provides funds for replacement of fixed asset at the end of its useful life
and Last and Most important
As we are Following Accrual System of Accounting so Matching of Cost and Revenue comes to the picture.
So Cost of Assets matches to the Sales in the year of the Sale.
Is This Answer Correct ? | 1 Yes | 0 No |
Answer / shraddha
depreciation means decrease in the value of assets.
the formula of depreciation is=cost-scrap value/no.of years
Is This Answer Correct ? | 0 Yes | 1 No |
Answer / dinesh
Depreciation means the life of the asset like
Machine,Vehicle,Computers year by year will decrease teh
capacity level so as per the statuory act the % of the
depreciation will be charged and debit the expenses reduce
the asset value
Is This Answer Correct ? | 0 Yes | 2 No |
Answer / gelli
Deprecation means reduced value of asset due to wear and
tear using of no of times.
Is This Answer Correct ? | 0 Yes | 3 No |
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