Question

Discuss depreciation. Include the definition, useful life, residual value, and depreciable cost in your discussion.

and How does a business decide which depreciation method is best to use?

need help for a discussion board

Answer 1

Depreciation is a measure of loss of value of a depreciable asset arising from use, or due to time or obsolescence through technology and market changes. It also includes amotization of assets whose useful life is predetermined.

Useful life means life of depreciation asset till the time asset can be used effectively and efficiently.

Residual value means remaining value when asset is fully depreciated.

Depreciable cost means cost of asset less salvage value means cost of asset that will be depreciated.

Company may adopt different methods of depreciation for different types of assets. Depreciation method should be selected based on revenue of an asset and it's depreciation expense.