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 blow out of the water of usage. Therefore Depreciation means decline in nurture of fixed summations on count on of usage. Definitions: Depreciation may be delimitate as the permanent and continuing diminution in the quality, sum or the value of an asset.William Pickles Depreciation in the shrinkage in the value of an asset at a given check as compared with its value at a previous date.J.H. Burton Facts to the highest degree depreciation; 1.Depreciation is spark of the operating cost 2.It is a step-down 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 sprout or any other reason 4.The decrease in the value of an asset is gradual and continuous. Causes of Depreciation: 1.Physical wear and pull The well-nigh important fact that contributes to depreciation of an asset is the fleshly wear and tear resulting from its use. It reduces the future capacity of the asset to resolve 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 etcetera 2.Physical admixture In case of sanctioned age assets, the deterioration military issues place with sheer transit of time. The assets are open to master(a) forces of nature such as winds, weather etc. 3. end of legal rights Certain assets the like patents, lease and licences, depreciate with the passage of time. 4.Fall in value due to demand fluctuations. Sometimes, the demand for operate 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 depreciati! on. Although, Im not 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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