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4. Depreciation

Depreciation represents the gradual reduction in the value of tangible fixed assets over time due to usage, obsolescence, and other factors. It plays a crucial role in accounting by ensuring financial accuracy regarding asset values and is a deductible expense for tax purposes. Various methods for calculating depreciation, such as Straight-Line and Written Down Value, have different implications for financial reporting and asset management.

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Sections

  • 4

    Depreciation

    Depreciation is the gradual reduction in the value of tangible fixed assets over time due to factors such as wear and tear or obsolescence.

    Learning Practice

  • 4.1

    Introduction To Depreciation

    Depreciation is the gradual reduction in the value of tangible fixed assets over time due to wear and tear, age, or obsolescence, playing a crucial role in accounting.

    Learning Practice

  • 4.2

    Causes Of Depreciation

    This section outlines the primary causes of depreciation, including physical wear and tear, obsolescence, efflux of time, and inadequate maintenance.

    Learning Practice

  • 4.3

    Factors Affecting Depreciation

    This section discusses the key factors affecting the calculation of depreciation, including asset cost, estimated useful life, salvage value, and depreciation methods.

    Learning Practice

  • 4.4

    Methods Of Calculating Depreciation

    This section discusses various methods of calculating depreciation, including the Straight-Line, Written Down Value, Annuity, and Sum of the Years’ Digits methods.

    Learning Practice

  • 4.5

    Advantages And Disadvantages Of Different Methods

    This section outlines the advantages and disadvantages of various methods of calculating depreciation.

    Learning Practice

  • 4.6

    Accounting For Depreciation

    This section discusses the recording and journal entries for accounting depreciation.

    Learning Practice

  • 4.7

    Conclusion

    The conclusion summarizes the key points in understanding depreciation and its significance in accounting.

    Learning Practice

References

acc11-4.pdf

Class Notes

Memorization

What we have learnt

  • Depreciation is the allocat...
  • Different depreciation meth...
  • Understanding and applying ...

Final Test

Revision Tests

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