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depreciation -- Decline in the value of a currency, financial asset, or capital good. When applied to a capital good, depreciation usually refers to loss of value because of obsolescence, wear, or destruction (as by fire or flood). Book depreciation (also known as tax depreciation) is the depreciation that the tax code allows businesses to deduct when they calculate their taxable profits. It is typically faster than economic depreciation, which represents the actual decline in the value of the asset. Both measures of depreciation appear as part of the national income and product accounts.
another definition...
depreciation -- Decrease in the value of equipment from wear and tear and the passage of time. Depreciation on business equipment is generally deductible for tax purposes.
another definition...
depreciation -- the decline in the dollar value of an asset over time and though use. The amount of annual depreciation may be computed differently for tax purposes than the actual decline in value.
Cassandra Carroll
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Does depreciation is charged on intangible assets?
Depreciation is charged to tangible assets while amortization is used to charge intangible assets.
Can depreciation charged at building?
Building is an asset for business and depreciation is only charged to assets of business so in this way depreciation is charged to building as well.
Is depreciation charged on current assets or not?
No
Is depreciation charged on current assets or not when tax payer is individual?
Depreciation is always charged on fixed assets and it does not has any relation with individual or company status.
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.
When depreciating fixed assetthe land is not depreciated?
Depreciation is always charged on the depreciable assets only.... books and teachers are teaching wrong actually.. that.. depreciation is charged on fixed assets.... but it is not true....Depreciation is always charged on fixed tangible assets which are depreciable...Assets which decrease their value because of their use, accident etc..for example, plant, machinery, motor vehicles etc...Clear all your accountancy doubts... use... "ULTIMATE BOOK OF ACCOUNTANCY"published by vishvas publications
Sum of the year depreciation?
In sum of year digit depreciation method depreciation is charged based on total number of years fixed assets is usable in business instead of using any percentage or fixed amount of depreciation.
Fixed asset depreciation schedule?
Fixed asset depreciation schedule shows the calculation of yearly depreciation expense which is scheduled to be charged to income statement for all fixed assets and the total amount of depreciation applicable to specific income statement of business.
Why is depreciation is charged on profit and loss account?
Depreciation is the allocation of the portion of assets value to fiscal year in which it is used it is charged to profit and loss account because it is that portion of asset value which is expensed and expenses are shown in profit and loss account.
Can depreciation be for fixed asset only?
Depreciation is the method of allocating the amount of fixed asset to the fiscal year in which that asset utilized and it is only applicable to fixed assets because current assets are fully utilizable in current year that's why full amount of current assets are charged to income statement.
Why should depreciation be treated as expense?
Depreciation is a portion of fixed asset charged to income statement due to wear and tear of assets during use in business in fiscal year that's why that wear and tear is accounted for by using depreciation.
Why is depreciation an estimate?
Depreciation is an estimate because it is the amount which is to be calculated at the time of purchase of assets to be charged to all fiscal years before using the actual assets as companies cannot wait for full asset to be depreciate first to allocate cost to previous years.
