3.1 Net Book value will decrease for asset.
3.2 Includes loss of value due to usage,
obsolescence.
3.3 Continuing Process.
3.4 Must be deducted before calculation taxable
profits, as this is an expired cost.
For E.g. If profit is 50000 INR and depreciation is 10000 INR then taxable profit is 50000 – 10000 = 40000 INR.
3.5 Does not include any actual cash flows.