What is depreciation?
Title: What is depreciation?
Category: /Business & Economy
Details: Words: 224 | Pages: 1 (approximately 235 words/page)
What is depreciation?
Category: /Business & Economy
Details: Words: 224 | Pages: 1 (approximately 235 words/page)
Depreciation
Fixed assets are those assets of the business that have a long life, are used in the business and are not for re-sale or for conversion to cash, e.g. motor vehicles, machinery, buildings, land, office equipment, etc.
However, usually, except for land, most fixed assets have a limited number of years of useful life.
Depreciation can be defined, in its simplest terms, as the difference between the original cost of the asset and
showed first 75 words of 224 total
You are viewing only a small portion of the paper.
Please login or register to access the full copy.
Please login or register to access the full copy.
showed last 75 words of 224 total
for four years.
In this instance there are two main methods of calculating the provision for depreciation, straight line and reducing balance. The choice of which method to use depends upon whether the main value to the business of the asset is gained evenly throughout the life of the asset or whether it is gained mainly in the early years of the asset when it is newer and the repairs and maintenance costs are lowest.