summary quality /quantity / value of the asset. - Accounts and Finance for Managers

Depreciation is the permanent and continuous diminution in the quality /quantity / value of the asset. The long term assets are becoming less efficient and poor quality in operations due to the continuous usage of the asset. The value of the asset mainly depends upon the efficiency and economy; which gets affected due to the accident. According to the concept of depreciation, the value of the asset is dispersed throughout the life of the period in order to match against the respective earnings of the year after year. The purchase value of the asset is an expenditure to be stretched to many number of years in order to equate with the revenues. The value of the asset after deducting the depreciation from the value of the asset at the beginning.


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