what causes depreciation?
Homework Answers
Depreciation refers to reduction in tha value of an asset (intangible or tangible). Intangible assets are ammortized whereas tangible assets are depreciated.
However, necessarily not all assets are prone to depreciation such as Land, current assets, stocks in the company etc.
Assets are prone to depreciation because of its wear and tear may be due to use (for tangible assets) or when there is a technology obsolescence (for intangible assets). This can be two of the few reasons why depreciation is caused.
Examples of Tangible assets are Plant & Machinery, Equipments, Vehicles etc. whereas Intangible assets are Patents, Copyright, trademarks, Softwares etc.
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