state briefly the necessity of providing depreciation.
Answers
Answered by
4
hello Arshiya
What is Depreciation?
Depreciation is the fall in the value of Fixed assets or Depreciable assets due to normal wear and tear. Means fall in value of assets due to normal use.
Objectives of Charging Depreciation
1. To ascertain the true value and fair view of the financial statements.
2. To calculate the accurate amount of Profit and Loss
3. To find the cost of production
4. To get the tax benefits from the GOVT.
5. To replace the depreciated assets with the new one
6. To comply the Law, because it is mandatory to depreciate the assets in normal course of business.
As you asked to explain in brief that why it is sufficient to understand.
hope it helps
#jerri
What is Depreciation?
Depreciation is the fall in the value of Fixed assets or Depreciable assets due to normal wear and tear. Means fall in value of assets due to normal use.
Objectives of Charging Depreciation
1. To ascertain the true value and fair view of the financial statements.
2. To calculate the accurate amount of Profit and Loss
3. To find the cost of production
4. To get the tax benefits from the GOVT.
5. To replace the depreciated assets with the new one
6. To comply the Law, because it is mandatory to depreciate the assets in normal course of business.
As you asked to explain in brief that why it is sufficient to understand.
hope it helps
#jerri
Similar questions