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If Fixed assets are properly maintained, depreciation is unnecessary. Do you agree?
Collins Abankwah
Verified answer
if fixed assets are properly maintained depreciation is unnecessary.do you agree
Mylene Wintheiser
Amenyo Emelia
Asomah Fati
Does depreciation is charged on intangible assets?
Depreciation is charged to tangible assets while amortization is used to charge intangible assets.
Depreciation is provided on?
on Fixed Assets
In accountancy what does depreciation refer to?
In accountancy depreciation refers to two different aspects: 1. the decrease in value of assets and 2. the allocation of the cost of assets to periods in which the assets are used.
What assets are not subject to amortization depreciation depletion?
Land is not subject to depreciation, depletion, or amortization.
What are the reasons for charging depreciation on non current assets?
depreciation non current asseate
If fixed assets are properly maintained, depreciation is unnecessary, do u agree?
yes
Does depreciation is charged on intangible assets?
Depreciation is charged to tangible assets while amortization is used to charge intangible assets.
Why is depreciation unnecessary when fixed assets is properly maintained?
Depreciation is a systematic allocation of the cost of a fixed asset over its useful life. It is not tied directly to the physical condition of the asset but is an accounting method to match the cost of the asset with the revenue it generates over time. Even when fixed assets are properly maintained and remain in good physical condition, they still undergo wear and tear or obsolescence over time. Depreciation reflects the gradual decrease in the asset's value as it contributes to generating revenue for the business. Here are a few reasons why depreciation is considered necessary, even for well-maintained fixed assets: **Matching Principle:** Depreciation aligns with the matching principle in accounting, where the costs associated with generating revenue should be recognized in the same period as the revenue is earned. Allocating the cost of an asset over its useful life helps in presenting a more accurate picture of the business's financial performance. **Asset Replacement:** Even if an asset is well-maintained, it will eventually need replacement due to technological advancements or changing business needs. Depreciation allows a business to set aside funds for the eventual replacement of the asset. **Financial Reporting:** Depreciation is crucial for providing a true and fair view of a company's financial position. It helps in presenting a more accurate balance sheet by reflecting the reduction in the value of fixed assets over time. **Tax Deductions:** Depreciation is often tax-deductible, providing businesses with tax benefits over the useful life of the asset. This can significantly impact a company's cash flow and tax liability. In summary, while proper maintenance can extend the physical life of fixed assets, depreciation is still necessary for accurate financial reporting, adhering to accounting principles, planning for asset replacement, and realizing tax benefits. It's a financial concept rather than a direct reflection of an asset's condition.
What is the different between the cost of depreciation of a asset and its related accumulated depreciation?
Cost of depreciation assets and accumulated depreciation is same as accumulated depreciaton calculates how much depreciation is charged till date while remaining is current book value of assets.
Fixed assets reduces profits in balance sheet?
depreciation of fixed assets reduces the profit as depreciation is also an expense.
Depreciation is provided on?
on Fixed Assets
Intangible assets are depreciated or not?
Intangible assets are subject to devaluation not depreciation.
In accountancy what does depreciation refer to?
In accountancy depreciation refers to two different aspects: 1. the decrease in value of assets and 2. the allocation of the cost of assets to periods in which the assets are used.
What are the reasons for charging depreciation on non current assets?
depreciation non current asseate
What assets are not subject to amortization depreciation depletion?
Land is not subject to depreciation, depletion, or amortization.
How do you record depreciation in a journal entry?
[Debit] Depreciation Account [Credit] Assets Account
Is depreciation charged on current assets or not?
No
