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INTRODUCTION Both accountants and business people are grappling with the controversial accounting term known as depreciation. When financial statements are prepared the depreciation figure can be confusing. It can be too high at times, or too low, or just not properly done at times. What is depreciation? Depreciation is the accounting term used to describe the wear and tear of assets over a certain period of time. Depreciation is expensed against the income statement, based on a certain rate, and reduces the assets value on the balance sheet. Since it affects the bottom line, it should be reasonable and fair. When profits on the disposal of assets are measured, a poor accumulated depreciation rate can affect that profit as well submitted by - Sean Goss