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Following are the causes of Depreciation except
Wear and tear due to use or passage of time.
normal factors
Expiration of legal rights.
Obsolescence.
Wear and tear due to use or passage of time means deterioration, and the consequent diminution in an assets value, arising from its use in business operations for earning revenue. Wear and tear is the physical deterioration. an asset deteriorates simply with the passage of time, even if they are not being put to any use.
Expiration of legal rights certain categories of assets lose their value after the agreement governing their use in business comes to an end after the expiry of pre-determined period.
Obsolescence is another factor leading to depreciation of fixed assets. Obsolescence means the fact of being “out-of-date”. Obsolescence implies to an existing asset becoming out-of-date on account of the availability of better type of asset.
So, only normal factors are not a cause of depreciation
By: santosh ProfileResourcesReport error
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