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DEPRECIATION

What is depreciation in accounting?
Depreciation is the systematic allocation of the cost of a tangible fixed asset over its useful life, reflecting the consumption of economic benefits embodied in the asset.
What is the formula for depreciation under the Straight Line Method?
(Cost minus Residual Value) divided by Useful Life in years.
Which accounting standard governs depreciation for Indian companies?
AS 10 (Property, Plant and Equipment) issued by the ICAI governs depreciation accounting for Indian companies, replacing the earlier AS 6.
Which method of depreciation charges a fixed amount every year on the original cost?
Straight Line Method (SLM) charges fixed annual depreciation.
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