Depreciation plays an important role in determining bottom line figure.Discussand list two criteria that are expected to affect the amount of depreciation and how the criteria can affect depreciation amount(With relevane examples) The category of plant, property and equipment is one of the major asset categories for a highlycapital based company and depreciation of those assets is a major operating expense.Depreciation is the process of allocating the cost of plant, property and equipment in order tomatch the cost of assets with the revenues earned over the period the assets are utilized.Depreciation is not about measuring the current value of assets. The amount of depreciationestimated for each operating period is based on certain criteria.

Depreciation: A charge on the value of the fixed assets of the company that reduces the value of…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Depreciation plays an important role in determining bottom line figure.Discuss

and list two criteria that are expected to affect the amount of depreciation and how the criteria can affect depreciation amount(With relevane examples)

The category of plant, property and equipment is one of the major asset categories for a highly
capital based company and depreciation of those assets is a major operating expense.
Depreciation is the process of allocating the cost of plant, property and equipment in order to
match the cost of assets with the revenues earned over the period the assets are utilized.
Depreciation is not about measuring the current value of assets. The amount of depreciation
estimated for each operating period is based on certain criteria.

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