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Definition of Depreciation, Facts and Causes
The word 'Depreciation' has been derived from the Latin word 'Depretium' which means 'decline in price' or 'value'. Depreciation relates to fixed assets which loose value on account of usage. Therefore 'Depreciation' means decline in value of fixed assets on account of usage.
Depreciation may be defined as the permanent and continuing diminution in the quality, quantity or the value of an asset.William Pickles
Depreciation in the shrinkage in the value of an asset at a given date as compared with its value at a previous date.J.H. Burton
Facts about depreciation;
1.Depreciation is part of the operating cost
2.It is a reduction in the value of an asset
3.The decrease in the value of an asset is due to its use, caused by wear and tear or any other reason
4.The decrease in the value of an asset is gradual and continuous.
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