Question

Allocation of depreciable amount of fixed assets to future periods is in accordance with ____________.

• A. Accounting Standard-6, Depreciation Accounting
• B. Accounting Standard-10, Accounting for Fixed Assets
• C. Accounting Standard-9, Revenue Recognition
• D. Accounting Standard-1, Disclosure of Accounting Policies

Answer 1

The correct option is A Accounting Standard-6, Depreciation Accounting

Accounting Standard-6 issued by The Institute of Chartered Accountants of India (ICAI), defines depreciation as “a measure of the wearing out, consumption or other loss of value of depreciable asset arising from use, effluxion of time or obsolescence through technology and market change.

Depreciation is allocated to charge a fair proportion of depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is pre-determined”.