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Definition And Meaning Of Depreciation Funds

Depreciation Funds:

Depreciation funds are the major part of internal sources of finance, which is used to meet the working capital requirements of the business concern. Depreciation means decrease in the value of asset due to wear and tear, lapse of time, obsolescence, exhaustion and accident.

Depreciation Funds
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Generally depreciation is changed against fixed assets of the company at fixed rate for every year. The purpose of depreciation is replacement of the assets after the expired period. It is one kind of provision of fund, which is needed to reduce the tax burden and overall profitability of the company.

Sourced From: Financial Management By C. Paramasivan And T. Subramanian
Definition And Meaning Of Depreciation Funds Definition And Meaning Of Depreciation Funds Reviewed by Blog Editor on Wednesday, March 22, 2017 Rating: 5

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