Depreciation is defined as a reduction in the value of an asset over time due to wear and tear. Every asset (Machinery, equipment, currency) value reduces over a specific period of time. Appreciation is the Opposite of depreciation which is an increase in the value of an asset over a period of time.
The motive of depreciation accounting is to match the cost of the asset to the revenue earned from such asset keeping in mind the Matching Concept.
Taxolawgy can maintain your depreciation accounting books by any method suitable for your business:
- Straight Line Method
- Diminishing Balance Method
- Units of Production Method
- Annuity Method
- Sinking Fund Method
- Profit or Loss on Disposal of Asset
- Change in Method of Depreciation
Maintenance of depreciation accounting books will help your business to know how much expenses are done an assets life.