Written Down Value Method of Depreciation
Depreciation represents the systematic reduction in the value of an asset over its useful life due to wear and tear, usage, or obsolescence. It helps in presenting a fair and realistic value of assets in the financial statements. There are various methods to calculate it, and the Written Down Value (WDV) Method, also known as […]
Common Mistakes Students Make While Calculating Depreciation
Depreciation is one of the foundational concepts in accounting that helps allocate the cost of a tangible asset over its useful life. Despite being a routine topic in financial reporting, many students commit recurring mistakes when calculating it. These errors distort profit figures and asset values, undermining the accuracy of financial statements. Calculating depreciation demands […]
Depreciation, Amortisation, and Depletion: What’s the Difference?
Every business owns assets — machines, vehicles, buildings, patents, and natural resources — that help it generate revenue. But these assets don’t last forever. Over time, they lose value as they are used, age, or become obsolete. Accounting standards require companies to systematically record this loss in value through three key processes: depreciation, amortisation, and […]