Depreciation Reserve Provision

Step 1: Meaning.
Fixed assets lose their value gradually due to use, wear and tear, passage of time, or obsolescence.
Step 2: Accounting term.
This decrease in value is termed as “Depreciation” and is charged to the Profit & Loss A/c as an expense.
Step 3: Conclude.
Hence, decrease in the value of fixed assets is called depreciation.
Final Answer: