What is depreciation in Accounting and how it is calculated? What are the types of depreciation? Explain Straight line method of depreciation and reducing balance method of depreciation.

Depreciation means decrease in the value of a asset over a period of time, due to usage, change in technology.
   In Accounting Depreciation is allocating  the cost of tangible assets over a life span of an asset. Depreciation is treated as expense in the profit & Loss a/c of business Organizations. There are different types of business Organizations.All these Organizations can treat depreciation as expense in Profit & Loss Account.
       For taxation purposes also depreciation is treated as expense.
      Depreciation is calculated on buildings, plant & machinery, furniture, vehicles etc;
Calculation of Depreciation:-
      Depreciation is equal to the cost of Asset minus(-) Salvage value divided by the life of an asset. Life of an asset is the estimated number of years an asset is put to use.
  Depreciation is calculated by the following methods:-

1. Straight line method
2. Written-down value method or Reducing balance method.

Depreciating assets are those assets whose value decrease over a period of time. some of depreciating assets are buildings, vehicles , office equipment, plant& machinery.