What is Depreciation. Can an organisation change its method of Depreciation. How?

Question

Accepted Answer

Depreciation is the decrease in value of an asset over time. Yes, an organization can change its method of depreciation.

Depreciation is a method of allocating the cost of a tangible asset over its useful life
It is used to reflect the decrease in value of an asset over time due to wear and tear, obsolescence, or other factors
An organization can change its method of depreciation by making adjustments to its accounting policies and procedures
For example, an organization may switch from straight-line depreciation to accelerated depreciation to better reflect the actual wear and tear on an asset
However, any change in depreciation method must be disclosed in the organization's financial statements

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