What is the purpose of depreciating assets?

  • Google+ icon
  • LinkedIn icon
  • 667 views

Depreciation is the reduction of the value of an asset over its useful life. This reduction in value is due to wear and tear or obscelence just to name a few.

Assets are depreciated so that the business accounts can reliably give a fair view of the financial position as at a certain date. This is an application of the prudence concept.

Rufaro M. GCSE Accounting tutor

About the author

is an online GCSE Accounting tutor with MyTutor studying at Durham University

Still stuck? Get one-to-one help from a personally interviewed subject specialist.

95% of our customers rate us

Browse tutors

We use cookies to improve your site experience. By continuing to use this website, we'll assume that you're OK with this. Dismiss

mtw:mercury1:status:ok