What is depreciation factor?

What is the depreciation factor?

The US Federal Communications Commission defines depreciation as follows:

Loss in value of telephone services that is not recovered by current maintenance or loss incurred due to possible cessation of provision of services,

This is for reasons resulting from current operating operations, and other reasons that should also be taken into account are damaged as a result of use, ruin, the interaction of factors, shortcomings, and obsolescence. And changes in industry and demand, as well as regulatory requirements.

On the other hand, the National Railroad Association and the Public Utilities Commission in 1943 referred to depreciation as:

Consumption or end of the life of a service or part of its benefit due to the influence of forces that work to stop factories or machines from servicing them. These forces include damage. As a result of use, damage, failure, obsolescence, and general requirements, which lead to the cost of services.

The European Group of Asset Valuers (TGOVOA) defined depreciation in accordance with Guidance Note No. (GN4A) published in 1988 as follows:

Measuring depreciation or permanent loss of the value of a fixed asset resulting either from use, expiration of time, technical obsolescence, and market changes, according to the assessment of a certified valuator.

In March 1995 the Royal Institution of Chartered Surveyors (RICS) published a guide and booklet in

Depreciation is a measure of consumption or any decrease in economic life for the fixed asset resulting either from use, expiration of time, obsolescence, technical changes, etc.

The valuator must take into account depreciation and obsolescence as independent phenomena, and must also estimate the value of the assets visually separately in physical deterioration and obsolescence.  This is because deterioration occurs due to actual damage to plants and machines, while obsolescence occurs due to technical, functional, and economic factors, and these factors are considered internal and external to the factories and machines being valuated.

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