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Definition: Depreciation is the method the company uses to spread an asset’s cost over its useful life. The cost of assets spreads over the period because of the economic value of the assets reduces due to their usage. For tangible assets the term is used depreciation , for intangibles, it is called amortization. Accounting depreciation or […] Depreciation under Section 32 of the Income Tax Act, 1961 is a tax deduction permitted for the decline in value of tangible and intangible assets used for business or profession. It is computed on the Written Down Value (WDV) of each block of assets and follows prescribed rates such as 40% for computers, 15% for plant and machinery, 10% for furniture, 5% for residential buildings, and 25% for intangible assets What is Depreciation ? Depreciation refers to the reduction in the value of a ... Depreciation : Definition Depreciation is the reduction in the value of a fixed asset due to usage, wear and tear, the passage of time, or obsolescence. The loss on an asset that arises from depreciation is a direct consequence of the services that the asset gives to its owner. Therefore, a reasonable assumption is that the loss in the value of a fixed asset in a period is the worth of the service provided by that asset over that period. From an accounting perspective, depreciation is the ... Find out what is depreciation in business accounting, types of depreciation , its formula and how depreciation is calculated in small business.
