Depreciation is charged at a certain rate on the asset
Answers
Depreciation is the permanent and continuous decrease in the book value of a depreciable fixed asset due to use, effluxion of time, obsolescence, expiration of legal rights or any other cause.
An analysis of definition given above highlights the characteristics of depreciation as follows:
It is related to depreciable fixed assets only.
It is a fall in the book value of depreciable fixed asset.
It is a permanent decrease in the book value of an asset.
Under the written down value method, depreciation calculated at a fixed percentage on the original cost (in the first year) and on the written down value, (in subsequent years) of fixed depreciable asset is written off during each accounting period over the expected useful life of asset....
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