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Is depreciation fixed cost or variable cost?

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Question ajoutée par mukkur srinivasan varadhan , Chartered Accountant , Chartered Accountant in practice
Date de publication: 2014/01/15
Rehan Qureshi
par Rehan Qureshi , Financial Consultant , Self Employeed

It can be fixed or it can be variable depending upon the method of depreciation adopted by the company. 

When it is calculated for a machine upon the no of units produced or no of machine hours worked than It is totally variable. But if it is calculated upon the straight line method regardless of any production than it is fixed.

SO it depend totally upon the method adopted by the company 

Khaled Abdelrehim ACCA DipIFR CMA
par Khaled Abdelrehim ACCA DipIFR CMA , Financial Analysis Assistant General Manager , Khalda Petroleum Company

It depends on the asset you depreciate and the method of depreciation. If the amount is fixed annually then the depreciation is fixed, and if the amount is variable then the depreciation is variable.

Bibin Varghese
par Bibin Varghese , SAP Implementation Manager , Acino Pharma

Depreciation standards are used by standards of the company. It can be variable or Fixed. But with the nature of most business, we should adopt the depreciation to be fixed.

Mohammad Tohamy Hussein Hussein
par Mohammad Tohamy Hussein Hussein , Chief Executive Officer & ERP Architect , Egyptian Software Group

Depreciation depends on the quantity produce. In this context it is a variable cost.

Jayanand Narendranath Narendranath
par Jayanand Narendranath Narendranath , General Manager/ Chief Financial and Opearions Officer , leading Interior Design and Joinery Manufacturing

Deprecition should be considered as a fixed cost as the value of the provision is known before hand as it is calculated year on year according to a defined step through out the asset usefull life.

Karen Marutyan
par Karen Marutyan , Country Finance Manager , Fawaz Abdullaziz Al Hokair & Co.

I think in any case it is a fixed cost because we are calculating depreciation on daily, monthly or annual bases, but we will never calculate it based on the quantity of produced goods. It means that if we are using it for producing goods we are depreciating it and it will be the part of cost but the cost of monthly depreciation will not depend on the quantity of production. That is why it will be fixed cost anyway.

Aizaz Hamid
par Aizaz Hamid , Assistant Manager Internal Audit , Sialkot International Airport ltd

its depend on orgnisation policy/ usage of methods according too gaap /ias some kind is fixed and some kind is variable.

Mahmoud Srouji
par Mahmoud Srouji , Project Manager , Edwall Enterprises

The two methods are correct ,depending about the depreciation of each asset and differs from company to another.

 

Mohammad Faraz
par Mohammad Faraz , Foreman- Senior Procurement and Logistics Executive , Chemtech Trading WLL

depreciation is Fixed cost but Treatment can go either ways.

Asim Azaldeen Abdalrahman Mhammed
par Asim Azaldeen Abdalrahman Mhammed , Property Manager , TAAM PROPERTY

Fully agreed with MR. Rehan thanx dear very good snswer

Anil Lalwani
par Anil Lalwani , Chief Accountant , Al Ahli Hospital

Depreciation is fixed cost

Variable cost is a cost which fluctuates with Turnover/Sales/production but depreciation doesn't.

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