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what is depreciation and methods mostly used
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Answer / sanmilan
All Assets have a Life Span. The capacity or productivity of
any particular asset need not be same as initial years after
using the same for 5 years. So cost of acquiring an asset is
spread over the estimated life of the assets. This is called
Depreciation.
Straight Line Method, Written Down method, Declining method
Sum-of the Years’ digit Method are the Deprecation Methods.
Most commonly used are Straight Line & WDV Methods.
| Is This Answer Correct ? | 8 Yes | 0 No |
Answer / anithajayanna
The term depreciation represents loss or diminution in the value of an asset consequent upon wear and tear ,obsolescence, effluxion of time or fall in market value.
Methods of Depreciation
1.Fixed installment Method
2.Diminishing Balance Method
3.Annuity Method
4.Depreciation Fund Method
5.Straight Line Method
6.Replacement Cost Method
7.Statutory Method
| Is This Answer Correct ? | 2 Yes | 0 No |
Answer / gangadhar das
More than 14 dep. methods are there but mostly common
method used by a company is (SLM & WDM)
SLM:- STRAIGHT LINE METHOD
WDM:- WRITTEN DOWN METHOD
| Is This Answer Correct ? | 2 Yes | 0 No |
Answer / barodianbuddy(acca)
According to IAS 16, their are two key methods of depreciation. They are Straight line method & Reducing balance method. The other methods used are Machine hour rate method & Sum of the digits method.
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