What is Income approach to fixed asset revaluation?

After initial recognition at cost if the carrying value of an item (of property, plant and equipment) is significantly different from the value measured on fair value basis then revaluation of asset is required....

What is the difference between depreciation account and accumulated depreciation account?

Capital assets also known as fixed assets are simply such assets which are used over a period longer than one year. Although real cash outflow takes place for the whole price at the time...

Is Residual value of the asset calculated on Present value or Future value basis?

One of the reasons for charging depreciation against the historical cost of the asset, revalued amount or simply carrying value of asset is that asset's book value should be reduced to such residual value...

What is meant by Economic benefits and how they flow to the entity?

It is easy to understand that entities around the world hold different sets of machinery, plant, equipment, building, land and other kinds of assets through which it offers products or services to its customers and...

What is Depreciation?

Depreciation basically signifies a steady decline in the value of asset. Generally it is studied in terms of the period of time that such decline in the value took place. Therefore, it is also described...

What are different causes of Depreciation?

Here are some of the reasons or causes of depreciation: Physical loss Any damaging change in the physical features of the asset or  in the productivity, efficiency or effectiveness of the asset either because of the...

What is the difference between Purchase ledger and Purchase account?

Quite a basic question in fact. A lot of students realize about these concepts as soon as they start studying Auditing especially when they have to apply different audit procedures where these basic concepts...

What is french straight line method of depreciation?

French straight line depreciation method is not completely a new method to calculate depreciation. Rather it is more of a derivation or extended version of usual straight line method accounting students learn in depreciation topic....

What is ‘Declining balance to Straight line crossover’ method of depreciation?

Majority of the students studying accounting, either at initial stages or experienced in accountancy academics, are familiar with two of the most renowned depreciation methods used by entities to calculate depreciation expense for the...

What is meant by Depreciation?

Depreciation simply means a steady decrease in the value of asset. Often it is studied in relation to the time period over which such decrease in the value has occurred. Therefore, often it is also...