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Depreciation is the decline in the future economic benefits of a depreciable non-current asset through wear and tear and obsolescence. It is an allocation process. It can be calculated by two main methods, each reflecting in a distinct prospe ....

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... accounting period and will gradually contribute to revenue over its useful life. However, it will give rise to future expenses as their future economic benefits are used up or expired. Examples of depreciable assets include machinery and motor vehicles. Generally, most non-current assets, with the exception of land, decline in their potential to provide future economic benefit. There are three factors that contribute to this decline. They are, the deterioration of a non-current asset due to the use of it, technical obsolescence, whereby certain assets become out of date due to technical innovations and improvements on a comparative bas ...