What do you mean by depreciation, Financial Accounting

Q. What do you mean by depreciation? What are the causes for depreciation? Explain the two methods of depreciation.

Depreciation means a fall in the quality, quantity or value of the asset. It is defined as the determination in the cost of an asset during a particular period due to wear and tear and obsolescence. It is the allocation of the cost of capital expenditure to the periods of its use. It is used to describe the decrease in book value of an asset. It is considered an expense and is listed in an income statement under expenses. Causes for Depreciation: -Wear and Tear -Efflux of time -Obsolescence -Accident -Fall in market price Methods of depreciation 1.Straight line depreciation  2. Reducing balance method

Posted Date: 8/14/2013 3:28:18 AM | Location : United States

Related Discussions:- What do you mean by depreciation, Assignment Help, Ask Question on What do you mean by depreciation, Get Answer, Expert's Help, What do you mean by depreciation Discussions

Write discussion on What do you mean by depreciation
Your posts are moderated
Related Questions
If fixed costs are $259,238, the unit selling price is $112, and the unit variable costs are $63, what is the break-even sales (units)?

Illustration of Accounting treatment of deferred tax A Ltd., bought an item of plant at a cost of £100,000 in year 2000. The estimated useful life of the plant was 5 years and

I need help with a mini accounting project. Here is a link to the questions I need answers to. Read the questions and instructions and if you think you can complete the case within

Related Party Transaction - Business or other transaction between persons who don't have an arm's-length relationship (for example a relationship with independent, competing intere

ARG Co presently has $50m of fixed assets and long-term debt of $10m. The issue of $3m of 9% debentures will raise fixed assets by $2m of buildings and machinery. There appears to

Financial ratio analysis Financial ratio analysis is a statistical tool that measures the relationship between two financial figures. It invol

Deferred taxation is caused by timing differences that arise when a transaction is recognized differently for accounting and tax purposes; for i.e, capital expenditure, that invol

Consider an economy with three states which occur with probability (0.2, 0.4, 0.4). Suppose a firm has a project which generates the state dependent cash flows (100, 200, 200) at t

Dividends out of the capital profits Dividends out of the capital profits are apportioned on the same basis as dividends out of income (Re. Doughty). (a) Variation of sec

Research and Development (R&D) - Research is a planned activity aimed at discovery of new knowledge with hope of developing new or improved services andproducts. Development is the