What is depreciation and what do you mean by obsolescence?

Question

Accepted Answer

Depreciation is the decrease in value of an asset over time, while obsolescence refers to when an asset becomes outdated or no longer useful.

Depreciation is the allocation of the cost of an asset over its useful life.
It reflects the decrease in value of the asset due to wear and tear, usage, or passage of time.
Obsolescence occurs when an asset is no longer useful or relevant in the current market.
It can be caused by technological advancements, changes in consumer preferences, or regulatory requirements.
For example, a computer may depreciate in value over time due to wear and tear, and become obsolete when newer models with better features are introduced.

Accepted Answer

Decline in value of fixed asset due to usage passage of time and obsolescence and obsolescence means decline in value of asset due to technological advancements.

What is depreciation and what do you mean by obsolescence?

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