Question

What is the result of depreciation of fixed assets?

Answer 1

Depreciation is the permanent and continuous decrease in the book value of a depreciable fixed asset due to use, effluxion of time, obsolescence, expiration of legal rights or any other cause.

Depreciation is a non cash expenditure which is charged against profit. The end result of depreciation of fixed asset is it reduces the net profit of business and provides funds to replace the fixed asset.