Figures and facts affect your wealth status indirectly
A person’s wealth status does not only depend upon the monthly income or income through the business, but also upon other assets he/ she has. We all are also aware that everything that we own gets depreciated with each passing year. Suppose, someone owns a car, after 5 or 7 years the resell value of that vehicle is going to be lower than the purchase value. This depends upon many factors like condition of the engine, body, other parts of vehicle and its running. All these factors collectively lead to wearing a tearing of many parts. Hence the condition of the car cannot be considered like a brand new car, hence this depreciation. In a very common way, definition of depreciation is a decline in the value of assets. This is also called fair value depreciation. Like every other specialized field economics too has defined this word in a specialized and detailed manner. Tax accountants take help of this terminology for determining the profit and loss theory for a person or for a business concern. The use of anything and its actual life are essential factors which help them in deciding the actual cost and its usability for near future.
Similar is the case with the business properties and machines. One of the leading investment website (investopedia) has offered a very apt definition for the fixed assets. It goes like, A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be consumed or converted into cash any sooner than at least one year’s time. Fixed assets are sometimes collectively referred to as “plant” or “unit ” of a company. When an order is placed to any company, they create a detailed purchase order form which includes many elements such as use of machinery, it’s costing, total time for completion and use of other facilities or fixed assets while completing it. With every passing year the economic life of any machine or other property gets reduced, this can be called fixed asset depreciation. This is one more term which gets automatically included into the billing. This is done so, for incurring the profits including all the costs required for the maintenance and repairing work necessary for fulfilling the order. There are software and templates available online for assessing the property.
Processing your request, Please wait....
