What Is Depreciation? What Are The Causes Of Depreciation? Is It A Cost? Why?
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Accounting is responsible for capturing all types of transactions in a company. Depreciation is an expense that relates to a company's fixed assets. It is important because depreciation expense represents the use of assets each accounting period.
The causes of depreciation are:
1)Wear and tear. Any asset will gradually break down over a certain usage period, as parts wear out and need to be replaced. ...
2)Perishability. Some assets have an extremely short life span. ...
3)Usage rights. ...
4)Natural resource usage. ...
Inefficiency/obsolescence.
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