Which accounting standard applies to depreciation?

AS-6

The correct answer is option 3- AS-6.

AS-6 refers to Accounting Standard 6 issued by the Institute of Chartered Accountants of India (ICAI). This standard is titled "Depreciation Accounting" and provides guidelines on how depreciation should be accounted for in the financial statements of Indian companies following Indian Accounting Standards (Ind AS) or Indian GAAP (Generally Accepted Accounting Principles).

Depreciation is “a measure of the wearing out, consumption or other loss of value of depreciable asset arising from use, effluxion of time or obsolescence through technology and market-change. Depreciation is allocated so as to charge fair proportion of depreciable amount in each accounting period during the expected useful life of the asset. Depreciation has a significant effect in determining and presenting the financial position and results of operations of an enterprise. Depreciation is charged in each accounting period by reference to the extent of the depreciable amount.