what do you understand by appreciation and depreciation of
fixed assets?
- 1 Answers
- 7744 Views
- I also Faced
- E-Mail Answers
Answer Posted / danny deb
Appreciation of an asset means that the market value has
gone higher than the value at which it has been brought.
eg. Land..u buy a land today for say 5 lakhs and after 2-5
years u sell the same land in 10 lakhs. This means that the
value of land(fixed asset) has appreciated by 5 lakhs.
Depreciation of an asset means that the value of the asset
has gone down from its buying or purchase value due to use,
wear and tear.
Eg.. Machinery...u buy a machine at the market value of 1
Lakh. U use it for 2 years. the value of the same machine
will reduce if u resell it as u have used it and also to the
constant wear and tear, repairs etc. A company or firm
always keeps a provision for this and deducts depreciation
at a suitable percentage(lets say 10% or 15%) depending on
the type of asset and its use.
Hopefully i have answered correct!!! ha..ha..ha
all the best!!!
| Is This Answer Correct ? | 9 Yes | 2 No |
Post New Answer View All Answers
Tell me what are the three factors that can affect your cash flow and business profitability?
What are the disadvantages of double entry system?
What are the 4 principles of gaap?
WHY CST CHARGED BILLS ARE RETAIL INVOICES.IT CANT BE TAX INVOICE.
Explain some of the accrued expenses and the accounts in which you would record them?
What are the characteristic features of financial accounting?
what is profit and loss(dr) in cash flow statement?
Define offset accounting?
What all are the documents need to check for a supplier payment?
under which ledger should i make opening work in progess and closing work in progress
How to create a liability for Service Tax in SAP
why are accounting firms needed?
wht is different between defered tax liablities and defered tax assets??????
Suppose you buy a one-year government bond that has a maturity value of Rs.1000. The market interest rate is 8 per cent. (a) How much will you pay for the bond? (b) If you purchase the bond for Rs.904.98, what interest rate will you earn from this investment?
How is an accounting department structured?
