Depreciation – Part 1 | Basics of Depreciation | SLM & WDV Methods | CA Foundation | Gaurav Chauhan

Описание: 📘 DepRECIATION – Part 1 | Basics, SLM & WDV Methods | CA Foundation


In this video, we cover the fundamental concepts of Depreciation as per CA Foundation syllabus, explained in a simple and exam-focused manner.


🔍 What is Depreciation?

Depreciation refers to the gradual decrease in the value of a fixed asset due to usage, passage of time, wear and tear, or obsolescence. It represents the allocation of cost of an asset over its useful life.


🎯 Need for Depreciation
✔ To show true and fair view of financial statements
✔ To match cost with revenue (Matching Principle)
✔ To calculate correct profit or loss
✔ To reflect reduction in asset value


⚙️ Causes of Depreciation
📉 Wear and tear due to usage
⏳ Passage of time
🚀 Obsolescence due to technology
🌪 Accidents and natural factors


📊 Factors Affecting Amount of Depreciation
🔹 Cost of the asset
🔹 Estimated useful life
🔹 Estimated scrap value
🔹 Method of depreciation used
🔹 Nature and usage of the asset


🧮 Methods Covered in This Video

🔸 Straight Line Method (SLM)
• Equal amount of depreciation every year
• Simple and widely used
• Suitable for assets with uniform usage


🔸 Written Down Value Method (WDV)
• Depreciation charged on reducing balance
• Higher depreciation in earlier years
• Suitable for assets with higher efficiency in early years


🎓 Best For:
📌 CA Foundation students
📌 Commerce students (Class 11 & 12)
📌 Students preparing from ICAI Study Material




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