American Accounting Association describes depreciation as: “Any decline in the service potential of facilities and other long-term assets should be recognized in the accounts in the periods in which such decline occurs. The potential of service of goods may decline due to gradual or sudden physical deterioration, potential consumption of the service through use even if no physical change is evident, due to obsolescence or a change in consumer demand So this definition takes only the valuation of goods." Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essayThe Institute of Chartered Accountants in Austria states: “Depreciation represents that part of the cost of a fixed asset to its owner which is not recoverable when the asset is finally put out of use by him. The provision against this Capital loss constitutes an integral cost of running the business during the effective commercial life of the asset and does not depend on the amount of profit achieved." Indian Accounting Standard – 6 (AS). -6) which was revised in August 1994 and was mandatory for accounts for financial years starting on or after 1.4.1995 defines: "Depreciation is a measure of wear and tear, wear and tear or other loss of value of a depreciable asset resulting from use, wear and tear, or obsolescence due to technological and market changes. Depreciation is allocated so as to allocate a reasonable portion of the depreciable amount in each accounting period over the expected useful life of the asset. AS-6 also explains the term depreciable assets as assets that: are expected to be used for more than one accounting period; are held by an enterprise for use in the production or supply of goods and services, for rental to others, or for administrative purposes. Not for the purpose of sale in the ordinary course of business According to FRS-15, The Accounting Standard of the United Kingdom and the Republic of Ireland, “The fundamental purpose of depreciation is to reflect. in operating profit the cost of using the tangible assets (i.e. the amount of economic benefit consumed by the entity) in the period. Therefore, the depreciable amount (i.e. the cost or revalued amount, less the residual value) of a tangible fixed asset should be recognized in the profit and loss account on a systematic basis which reflects as closely as possible how the economic benefits of the activity are consumed. per entity, over its useful economic life." (Summary Paragraph FRS-15). Below are the words of the Australian Accounting Standard (AASB-1021) on depreciation: "The depreciable amount of a depreciable asset shall be allocated on a systematic basis over its useful life. The 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 depreciable amount shall be recognized as an expense, except to the extent the amount set aside is included in the carrying amount of another asset." (paragraph 5.1 AASB-1021 Australia) Supreme Court of the United States, in Lindheimer vs. . Illnois The Bell Telephone Company case defines depreciation: “In general, depreciation is the loss, not recovered by current maintenance, due to any factors causing the property to be permanently retired. These factors include wear and tear, decay, inadequacy and obsolescence. Annual depreciation is the loss that occurs in one year." Whereas the Statement of Standard Accounting Practice (SSAP-12) states: "Depreciation is a measure of wear and tear, wear and tear or other loss."