The outlay of a Fixed Asset is spread over several years and annually only a fraction thereof expires, this fraction called expired cost or Depreciation, is charged against current revenues and the rest termed unexpired cost, is carried forward for future expiration.
Depreciation may be defined as the permanent decrease in the value of an asset due to use and/or the lapse of time. It is the permanent and continuous diminution in the quality, quantity or value of an asset.
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