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Other than the legal compulsion,why should depreciation be provided for in the Accounts?

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Question ajoutée par mukkur srinivasan varadhan , Chartered Accountant , Chartered Accountant in practice
Date de publication: 2013/11/21
Subhranshu Ganguly
par Subhranshu Ganguly , Quality Analyst. , WIPRO

Every asset hasa life span. After that the asset has to be replaced. To make a provision for the replacement and to get benifits in taxation as amount of yearly depreciation is deductable from profits ,depreciation has to be provided for assets.

Mohammad Tohamy Hussein Hussein
par Mohammad Tohamy Hussein Hussein , Chief Executive Officer & ERP Architect , Egyptian Software Group

Depreciation reserves the value of the asset which enables you to maintain your assets to ensure effective production capacity. On the other hand, depreciation is used to calculate the direct cost of your product/service.

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