Depreciation : -

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written 5.2 years ago by

teamques10 ★ 68k

Depreciation is the loss in the value of the property due to its use, life, wear, tear, decay and obsolesce.
This is an assessment of the physical wear and tear of the building or property and is naturally depends on its original condition, quality or maintenance and made of use.
Thus the value of a building or property decreases gradually up to the utility period due to depreciation.
There are different methods to calculate deprecations.
Whatever, the method is adopted book value of a property at a particular time is the original cost less all depreciations till the time.
The general annual decrease in the value of a property is known as annual depreciation.
The present value of an old building should be worked out on the basis of an annual rate of physical deterioration multiplied by the building age and concluding by making a final adjustment for obsolescence.

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