MANAGEMENT

Detailed explanation-1: -Depreciation is a mandatory deduction in the profit and loss statements of an entity using depreciable assets and the Act allows deduction either using the Straight-Line method or Written Down Value (WDV) method. The calculation for depreciation under the WDV method is widely used.

Detailed explanation-2: -Written-down value can be calculated by a method of depreciation that is sometimes called the diminishing balance method. This accounting technique reduces the value of an asset by a set percentage each year.

Detailed explanation-3: -Straight-Line Method: This is the most commonly used method for calculating depreciation. In order to calculate the value, the difference between the asset’s cost and the expected salvage value is divided by the total number of years a company expects to use it.

Detailed explanation-4: -Method of Depreciation under Companies Act, 2013 Written Down Value Method (WDV)-WDV is also known as the Declining balance method. Under this method, a company charge the depreciation rate on the reducing balance of the Asset.