Cloud Web-based ERP SaaS Software & GST
From pure accounting terms, Depreciation is the process of reallocating the cost of the Fixed Assets over the lifespan of the assets that’s used to make production or business. Means, by using Depreciation methods, we are reducing the value of Fixed Assets in a pre-defined agreed method till the asset value becomes Zero or Negligible. These assets are called as Depreciable assets. Depreciation is a method of allocation of costs and it determines the value placed on the asset in the balance sheet. As we are aware fixed assets are buildings, Lands, Factory premises, office equipment computers, Machines and Tools and Dies etc. Most of these values are depreciated as the year passes. Only exception to this process is Value of the LAND and this appreciates with time. So be clear with this.