The American Accounting Association describes depreciation as follows: “Any reduction in the service potential of facilities and other long-lived assets shall be recognized in the accounts of the periods in which such decline occurs. product. The service potential of assets may decrease due to gradual or sudden physical deterioration, consumption of service potential through use even if no physical change is apparent, due to obsolescence or obsolescence. change in consumer demand. This definition therefore only takes the valuation of assets. "Say no to plagiarism. Get a tailor-made essay on “Why violent video games should not be banned”? Get the original essay The Institute of Chartered Accountants in Austria states: “Depreciation represents that part of the cost of a capital asset for its owner which is not recoverable when the asset is finally put out of use by him. The provision against this loss of capital is an integral part of the cost of conducting the business during the commercial life. effective asset and does not depend on the amount of profit earned” Indian Accounting Standard – 6 (AS -6) which was revised in August 1994 and which was mandatory for accounts for periods commencing on or after 1.4.1995, defines: “Depreciation is a measure of wear, consumption or any other loss of value of a depreciable asset resulting from use, the flow of time or obsolescence due to the evolution of technology and the market. Depreciation is allocated so as to charge a fair proportion of the depreciable amount in each accounting period over the expected useful life of the asset. Depreciation includes the amortization of assets with a predetermined useful life. AS-6 also explains the word depreciable assets as assets that: Are expected to be used for more than one accounting period; have a limited useful life; are held by a business for use in the production or supply of goods and services, for rental to others, or for administrative purposes. Not for sale in the ordinary course of business. According to FRS-15, The Accounting Standard of United Kingdom and Republic of Ireland, "The fundamental objective of depreciation is to reflect in operating profit the cost of using property, plant and equipment (i.e. the amount of economic benefit consumed by the entity) during the period Therefore, the depreciable amount (i.e. the cost or revalued amount, less the residual value) of a tangible capital asset must. be recognized in the profit and loss account on a systematic basis which reflects as closely as possible the pattern in which the economic benefits of the asset are consumed by entity, over its useful economic life” (FRS Summary Paragraph. -15) Below are the words from the Australian Accounting Standard (AASB-1021) on depreciation: “The depreciable amount of a depreciable asset must be allocated on a systematic basis over its useful life. depreciation method applied to an asset must reflect how the future economic benefits of the asset are consumed or lost by the entity. The allocation of the depreciable amount must be recognized as an expense, except to the extent that the allocated amount is included in the carrying amount of another asset. » (paragraph 5.1 AASB-1021 Australia) United States Supreme Court, in Lindheimer v. Illnois In the Bell Telephone Company case, depreciation is defined as follows: “Generally speaking, depreciation is the loss, not restored by routine maintenance, which is due to all factors causing ultimate decommissioning of a good.."