(i) Simplicity
(ii) Equality of Depreciation burden

(i) Assets used in the business, cost of which can be written off over their useful life are known as depreciable fixed assets.
(ii) Buildings, machinery, vehicles, furniture, computers and equipment are examples of depreciable fixed assets.

Amount of depreciation per year = \({Original\ cost\ of\ the\ asset − Estimated\ scrap\ value\over Estimated\ useful\ life\ of\ the\ asset\ in\ years}\)
\(= \frac{2,20,000 - 10,000}{10} \\ =\frac{2,10,000}{10}\)
= Rs.21,000 per year
Rate of depreciation per year = \({Amount\ of\ depreciation\over Original\ cost}\times100\)
\(={21,500\over 2,20,000}\times100=9.55\%\)

\( \text { Amount of depreciation per year } =\frac{\text { Original cost of the asset }-\text { Estimated scrap value }}{\text { Estimated useful life of the asset in years }} \)
\(={10,000-2,000\over 10}={8,000\over 10}\) = Rs.800 per year
Rate of depreciation = \({Amount\ of\ depreciation\ per\ year\over Original\ cost}\times100\)
\(={800\over 10,000}\times100=8\%\)

Amount of depreciation per year = \(Original\ cost\ of\ the\ asset − Estimated\ scrap\ value\over Estimated\ useful\ life\ of\ the\ asset\ in\ years\)
\(={1,00,000 – 10,000\over 10}={90,000\over 10}\) = Rs. 9,000 per year
When it is plotted on a graph for 5 years, it appears as follows:

Amount of Depreciation = \({Total\ cost - Scrap\ value\over Estimated\ life}\)
\(={25,000-1,000\over 10}={24,000\over 10}\)
= Rs.11,200
Rate of Depreciation = \({Amount\ of\ Depreciation\over Original\ Cost}\times100\)
\(={11,200\over 60,000}\times100=18.67\%\)

Purchase price of plant = 4000
Erection charges = 2,000
Odginal cost = Ptuchase price + Installation charges
(i.e 40,000) + 2,000 =42000)
Effective life of the plant = 5 years
Estimated scrap value = Nil
\(\text { Amount of Depreciaion }=\frac{\text { Original cost - Estimated scrap value }}{\text { Estimated useful life of the asset in years }}\) 
= \(\frac{42000-0}{5 \text { years }}\) 
= Rs.8,400

(i) Under this method, the amount spent on the purchase of an asset is regarded as an investment. As such, the interest at a certain rate is calculated on the opening balance of the asset account each year and debited to the asset account.
(ii) The amount of depreciation written off is ascertained by- referring to the annuity table. Annual depreciation is uniform throughout the working life of the asset.

The following are the different methods of providing depreciation:
(i) Straight line method or Fixed instalment method or Original cost method
(ii) Written down value method or Diminishing balance method
(iii) Sum of years of digits method
(iv) Machine hour rate method
(v) Depletion method
(vi) Annuity method
(vii) Revaluation method
(viii) Sinking fund method
(ix) Insurance policy method