0Depreciation is the normal wear and tear in the value of a fixed asset over it's usage, effluxion of time, change in technology, etc.
The need for depreciation arise basis matching concept of accounting. This is calculated in order to match the revenue generated out of the usage of specific fixed assets I'm question.
A business entity may adapt suitable method of depreciation such as, straight line method , written down value method, annuity method, productive capacity method, no of useful life and actual usage hours for a special period,etc.
The rates of depreciation is determined based on the method of depreciation adapted.
