Question

Define Depreciation. What are the causes of depreciation?​

Answer 1

Depreciation is a ratable reduction in the carrying amount of a fixed asset. ... The causes of depreciation are: Wear and tear. Any asset will gradually break down over a certain usage period, as parts wear out and need to be replaced. Eventually, the asset can no longer be repaired, and must be disposed of

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Answer 2

$\small\mathbf\orange{{ Depreciation :-}}$

• Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy.
• Depreciating assets helps companies earn revenue from an asset while expensing a portion of its cost each year the asset is in use.

$\small\mathbf\orange{{ Causes \: of \: Depreciation :-}}$

• Wear and tear. Assets diminish in their value as they are constantly used in the organization.
• Exhaustion. Assets are bound to lose their value as time progress.
• Depletion. Natural resources such as mines, quarries and oil wells are of a wasting character.
• Deterioration.