What is Depreciation on Fixed Assets?

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Fixed Assets and Depreciation Example Suppose I purchase a Car for Rs 500000 Can I sell it for 5 Lacs after 1 year? No Its value will be less Suppose its Value is Rs 400000 after 1 Year How much has the value of Car Depreciated (Decreased) Purchase Price 500000 Current Price 400000 Depreciation 100000 Concept of Depreciation New Car Purchased for Difference of Rs 100000 Value After is 1 Year Depreciation This Car This Depreciation is is Fixed Asset Expense (Shown in Balance sheet) (Shown in Profit and loss) What is Depreciation It is the decrease in value of an asset This is because of use or obsoesence (product becoming outdated) Is Depreciation Expense,Income,Assets or Liability? Depreciation is an Expense (it is reduction in value of asset,so it is expense or loss) Depreciation (Reduction in Value of Fixed Assets) Due to Due to Use Obsolecense Example Example Machine Purchased I Phone Purchased Used Continuously Not Used Got damaged due Became to wear and tear Outdated Value Decreased Value Decreased