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Depreciation is a(n) & rational allocation of the cos of an asset over its depreciable life.

Depreciation is a(n) & rational allocation of the cos of an asset over its depreciable life.
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Yes.As we purchase a fixed assets having usefull life of more than one year and it involves a huge amount of acquisition cost .If we recognise full expenditure in the year of purchase of asset it will lead understatement of profit for purchasing year .and in upcoming years in which that asset will be used having no expense therefore in future years it will lead to overstatement of profit.

Depreciation is an systematic and rational allocation of cost of assets over it's useful life .We have to provide depreciation for accounting as well as for tax purposes.

Hence the above given statement is correct.

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