princesspeach

What do you know about policy of depreciation?

Explain the policy of depreciation precisely.

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The management of the business selects the policy for charging depreciation. There is no law binding on the management. The management is free to choose method of depreciation and policy of charging depreciation. Normally two policies are commonly used: • Depreciation on the basis of use • In the year of purchase, full year’s depreciation is charged; where as, in the year of sale no depreciation is charged. Now it is up to the management to decide, what method and what policy is better and effective for their business. Source:http://in.docsity.com/en-docs/Qouted_Companies-Financial_Accounting-Lecture_Handout

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larryp

The management knows better what policy to adapt according to the course of business.

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