Accounting Tools

FEBRUARY 12, 2024

What is Wear and Tear? Wear and tear is the normal degradation of an asset from ongoing usage, even when it is being properly maintained. Wear and tear gradually reduces the value of an asset.

Accounting 40

Accounting Accounting 40

Accounting Tools

MARCH 28, 2024

Depreciation Obsolescence differs from the ongoing decline in the value of assets that is caused by normal usage, resulting in wear and tear. Related Articles Obsolete Inventory Obsolete Inventory Identification Obsolete Inventory Percentage

Accounting 40

Accounting Accounting 40

Accounting Tools

NOVEMBER 2, 2023

Wear and Tear Any asset will gradually break down over a certain usage period, as parts wear out and need to be replaced. Related Articles Is Depreciation a Direct Cost or Indirect Cost? But why do we need depreciation at all? The causes of depreciation are noted below. Is Depreciation an Operating Expense?

Auditing 75

Auditing Accounting Accounting 75

Accounting Tools

APRIL 17, 2024

Related AccountingTools Courses Fixed Asset Accounting How to Audit Fixed Assets Related Articles Depreciable Asset The Purpose of Depreciation Wear and Tear What is a Wasting Asset? A wasting asset is any asset that will decrease in value over time, and which has a specific useful life.

Computation 40

Computation Auditing Accounting Accounting 40

Accounting Tools

NOVEMBER 5, 2023

It is intended to approximately reflect the decline in value of an asset over time, due to wear and tear. Related Articles Overview of Depreciation The Accounting Entry for Depreciation The Causes of Depreciation Depreciation is used to gradually charge the book value of a fixed asset to expense.

Record Keeping 75

Record Keeping Auditing Tax Accounting 75

Accounting Tools

JULY 21, 2023

For example, a tractor will experience a reduced value over time as it incurs wear and tear through daily use. Related Articles Exit Value Market Value Maturity Value Value-in-Use Changes in Value The value of an asset can change. A customer is more likely to pay an increased amount when the perceived level of value is higher.

Collections 40

Collections 40

Accounting Tools

JUNE 19, 2023

However, if production levels exceed 3 million units per year, then this fixed cost will increase, because of additional wear and tear on the facility. Related Articles Financial Ratio Analysis Incremental Analysis Quantitative Analysis The Limitations of Ratio Analysis Types of Financial Analysis per unit too low.

Financial Analysis 40

Financial Analysis Budgeting Cost Accounting Accounting 40