Depreciation is the part of the original COST of the FIXED ASSETS CONSUMED during its period of use by a firm.FIXED ASSETS.

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Depreciation is the part of the original COST of the FIXED ASSETS CONSUMED during its period of use by a firm.FIXED ASSETS

Fixed Assets Of long life To be used in the business Not bought with the main purpose of resale. Video Link

Depreciation remains at an equal amount each year. The cost price of the asset is then divided by the number of years of the estimated useful life to give the depreciation charge each year.

Method I:

Straight-Line Method

A fixed percentage for depreciation is deducted from the cost in the first year. In the second or later year, the same percentage is take off the reduced balance.

Method II:

Reducing-Balance Method

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