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Depreciation

Depreciation. Nature and Calculations. Definition. It is the part of the cost price of the fixed asset consumed during its period of use by the firm. Causes of Depreciation. Physical depreciation Economic factors Time factor Depletion. Methods of calculating depreciation.

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Depreciation

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  1. Depreciation Nature and Calculations

  2. Definition • It is the part of the cost price of the fixed asset consumed during its period of use by the firm.

  3. Causes of Depreciation • Physical depreciation • Economic factors • Time factor • Depletion

  4. Methods of calculating depreciation Straight Line Method Revaluation Reducing Balance Method

  5. Straight Line Method Cost - Residual value Estimated economic life

  6. Reducing Balance Method Net book value X r% Net book value = Cost - Accumulated Depreciation

  7. Revaluation Method Opening balance - Closing Balance

  8. The End

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