What is total amount of depreciation? |
Acquisition Cost + Salvage Value Acquisition Cost – Salvage Value Acquisition Cost x Salvage Value Acquisition Cost / Salvage Value |
Acquisition Cost – Salvage Value |
The correct answer is option 2- Acquisition Cost – Salvage Value. The depreciation on fixed assets is provided to recognise the cost of the asset consumed during an accounting period since the life of such assets extends beyond single accounting year. Usually, depreciation is not provided on freehold land. |