Definition of depreciation, facts and causes.

The word Depreciation has been derived from the Latin word Depretium which means decline in price or entertain. Depreciation relates to rigid pluss which loose esteem on nucleotide of usage. Therefore Depreciation means decline in hold dear of dogged assets on grievance of usage. Definitions: Depreciation may be delimitate as the permanent and continuing diminution in the quality, bar or the value of an asset.William Pickles Depreciation in the shrinkage in the value of an asset at a given designation as compared with its value at a previous date.J.H. Burton Facts or so depreciation; 1.Depreciation is spark of the operating cost 2.It is a diminution in the value of an asset 3.The step-down in the value of an asset is due to its use, caused by break-dance out and institutionalize or any other reason 4.The decrease in the value of an asset is gradual and continuous. Causes of Depreciation: 1.Physical wear and accuse The well-nigh important fact that contribu tes to depreciation of an asset is the forcible wear and tear resulting from its use. It reduces the future capacity of the asset to servicing and its earning power. As a result, it reduces the value of an asset. A tangible asset physically deteriorates by wear and tear caused from vibration, friction, movement, strain, erosion and so on 2.Physical disablement In case of sanctioned age assets, the deterioration reads place with sheer course of time. The assets are open to primary(a) forces of nature such as winds, weather etc. 3.

last of legal rights Certain assets exchangeable patents, lease and licences, depreciate with the passage of time. 4.Fall! in value due to demand fluctuations. Sometimes, the demand for serve provided by the assets may fluctuate which causes a fall in the value of an asset. 5.Obsolescence Depreciation may be caused on account of obsolescence. It may be due... Good info to classify depreciation. Although, Im non sure what one would gain by reading this- its like a long definition - I like essays that take a stance on something. If you need to get a full essay, order it on our website: OrderCustomPaper.com

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