If fixed assets are properly maintained, depreciation is unnecessary do you agree.?
on Fixed Assets
Depreciation.
Depreciation is always charged on fixed assets and it does not has any relation with individual or company status.
Depreciation is the wear and tear charge allocated to specific fiscal year thorugh income statement for related fixed tangible assets while amortization is same as depreciation just it is done for intangible fixed assets.
If fixed assets are properly maintained, depreciation is unnecessary do you agree.?
depreciation of fixed assets reduces the profit as depreciation is also an expense.
on Fixed Assets
Depreciation is the method of allocation of part of cost to all fiscal years to which fixed asset is used for revenue generation to income statement
Depreciation on Fixed Asset (Furniture, Building) are considered as Non-Current Assets
Depreciation.
The depreciation to fixed asset ratio measures how diligently the company is replacing its old fixed assets with replacements. Companies will acquire fixed assets such as new buildings or machinery with hopes of gaining sales over the lifespan of those assets.
One of the advantages of fixed assets are that over the period of the fixed asset, the total burden of depreciation and repair costs are disproportional over the effective life of the asset. One of the disadvantages is that the depreciation is not a suitable method for assets like plants and machinery as depreciation is constant while the repairs on such assets will be heavier in later years.
Debit Depreciation Expense Credit Accumulated Depreciation
International Accounting Standard number 16 applies to valuation and depreciation of fixed assets.
Depreciation is always charged on fixed assets and it does not has any relation with individual or company status.
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