Methods of Depreciation

Depreciation

Depreciation: Depreciation denotes gradually and permanent decrease in the value of asset due to wear and tear, technology changes, laps of time and accident.
Methods of Depreciation:

1. Uniform charge method:
   1. Fixed installment method
   2. Depletion method
   3. Machine hour rate method
2. Declining charge method:
   1. Diminishing balance method
   2. Sum of years digits method
   3. Double declining method
3. Other methods:
   1. Group depreciation method
   2. Inventory system of depreciation
   3. Annuity method
   4. Depreciation fund method
   5. Insurance policy method.