Calculating deprecation

Why while calculating deprecation we do not consider the change in prices of the machinery in the market i.e fluctuation in prices in market? As we consider the accounting period one of the concepts

Interview Candidate
Nov 15th, 2011
3
5639

Cost Accounting

Answer

Showing Answers 1 - 3 of 3 Answers

Anand

May 15th, 2012

How will Application know the current market price of your machinery. you need to do revaluation to asset according to market fluctuation and then submit the Deprecation.

jayaprakash mc

Aug 12th, 2015

We have to account for all anticipated losses but not profits. If the usefulness of the asset has gone down due to technical or behavioral changes, we are at liberty to provide additional deprecation. How ever we should not consider appreciation in market value.

Hamayun

Mar 31st, 2016

According to the international accounting standards we take the value of an asset whichever is less either market value or actual value.