How does depreciation treat in financial statements?

[Hasan Raza]

Dear all as most of you know that depreciation is the annual wear and tear in your fix asset or we can say deduction in original value of the long term assets. There are three to four methods of calculating it. On the one side it is deducted from asset in balance sheet that is one entry.
As every account is treated or written twice.
Where does it treated othen than in Balance sheet?

 

[Seun4luv]

Depreciation expense is reported on the income statement as any other normal business expense. If the asset is used for production, the expense is listed in the operating expenses area of the income statement. This amount reflects a portion of the acquisition cost of the asset for production purposes

 

[Ezzyoj]

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[Chumzy]

Depreciation is charged from an asset at the end of the financial period. It is taken off to account for wear and tear of the asset and get the net value. On the other hand is charged as an expense for the year recored in the profit statement.

 

[Akinwale701]

Dear all as most of you know that depreciation is the annual wear and tear in your fix asset or we can say deduction in original value of the long term assets. There are three to four methods of calculating it. On the one side it is deducted from asset in balance sheet that is one entry.
As every account is treated or written twice.
Where does it treated othen than in Balance sheet?

Depreciation is a reduction in the value of fixed assets. so to adjust for depreciation in balance sheet, you remove the total amount of depreciation (otherwise called accumulated deprciation) from the total value of the assets. The remaining amount is known as Net Book Value.

 

[Ralphjoe]

Depreciation is also covered the profit and loss account whereby the company decides to charge depreciation as an expenses rather than a cost of fixed asset. This is not quite common with most companies although it mostly depends on each company's policies.

 

[Tariq Nazir]

Depression is real and we must all try to avoid it at all cost. When we stop worrying unnecessarily we will be able to control being depressed. A lot of people are depressed today not because they can't overcome the situation but because they don't know how to control

 

[Taimoor Jutt]

Depreciation is typically displayed on the income statement as an incidental, operational cost. It is a permissible expense which, along with other indirect expenses such as administrative and marketing costs, reduces the gross profit of a corporation.

 

[Richard92]

Depreciation of costomers affect market the financial statement of a business and will also slow down the business, as a wise because man you must always maintain your costomers to avoid depreciation of customers.

 

[Denuola]

On the income statement, depreciation is usually shown as indirect, operating expenses. It is an allowable expenses that reduces a company's gross profit along with other indirect expenses like administrative and marketing cost.

 

[EMMANUEL]

The depreciation term is found on both the income statement and the balance sheet. On the income statement, it is listed as depreciation expense and refers to the amount of depreciation that was charged to expense only in that reporting period. On the balance sheet, it is listed as accumulated depreciation and refers to the cumulative amount of depreciation that has been charged against all fixed assets.

 

[Hasan Raza]

Depreciation is a reduction in the value of fixed assets. so to adjust for depreciation in balance sheet, you remove the total amount of depreciation (otherwise called accumulated deprciation) from the total value of the assets. The remaining amount is known as Net Book Value.

Sir I think you didn't understand my question completely. I already explained about the treatment of depreciation in balance sheet that it will be deducted from Fix asset in balance sheet.
My question was about second entry that except balance sheet where it will be treated under contra entry rule??

 

[Tollytee]

On the income statement, depreciation is usually shown as an indirect, operating expense. It is an allowable expense that reduces a company's gross profit along with other indirect expenses like administrative and marketing costs.

 

[Ayokex]

Depreciation is regarded to as a loss of value due to usage. When you purchase a particular material to be used in business. Depreciation sets the moment you put those things in use. In financial statement, depreciation is often considered and taken care of by calculating cost of purchasing the material with respect to the expected life span of the material. A certain percentage is determined.

Post automatically merged: Feb 10, 2021

Depreciation is the wearing away and breaking down of business assets as a result of constant usage within a particular period of time. Depreciation is determined by the percentage of the cost of an asset with respect to the time of usage.

 

[Onachukwu]

On the income statement, depreciation is usually shown as an indirect, operating expense. It is an allowable expense that reduces a company's gross profit along with other indirect expenses like administrative and marketing costs.

 

[Onachukwu]

Financial Statement Effects
On the income statement, depreciation is usually shown as an indirect, operating expense. It is an allowable expense that reduces a company's gross profit along with other indirect expenses like administrative and marketing costs

 

[Sutrahen]

Depreciation is defined as the systematic allocation for the cost of an asset over its useful life. The treatment of depreciation in the financial statement is to credit the asset account with the amount of depreciation and debit accumulated depreciation account with the same value.
The effect is that it is expensed in the profit and loss account and at the same time reduces the value of assets in the balance sheet.
Depreciation. Is just a management way of making the business pay for using its assets to generate revenue.
In tax law this is greatly contested hence the introduction of Capital Allowance.

 

[Eodine]

Depreciation is the reduction of the value of an asset. Simply means that an asset after being acquired and used woul not have the same value as a new one again in months or years. Depreciation is charged as a current liability in the statement of account.

 

[Blessingedidiong]

Depreciation is the reduction in the value of an asset. The depreciation of an asset will definitely reduce the profit of the business since the value at which it was gotten is higher than the value after it has been acquired.

 

[Dowenship]

This your write up looks complicated to me more like an accounting outline.

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Post automatically merged: Feb 28, 2021

Dear all as most of you know that depreciation is the annual wear and tear in your fix asset or we can say deduction in original value of the long term assets. There are three to four methods of calculating it. On the one side it is deducted from asset in balance sheet that is one entry.
As every account is treated or written twice.
Where does it treated othen than in Balance sheet?

depreciation is not necessarily annual wear and tear in an assets. Its not until the year runs out before the record is noticed. As long as there is a constant record of each financial statement of production. They can deduce the depreciation from it.