Definition Of  Depreciation :

In the words of Spicer and Pegler, “Depreciation is the measure of the exhaustion of the effective life of an asset from any cause during a given period”.

Carter defines depreciation as “the gradual and permanent decrease in the value of an asset from any cause”.
According to ICMA (Institute of Cost and Management

Accountants – London) Terminology “Depreciation is the diminution in intrinsic value of asset due to use and / lapse of time”.

The above definitions reveal that when fixed assets are used in business to generate income, they lose their production capacity or
earning capacity and at a particular point of time they render themselves useless. This reduction in the production capacity or earning capacity is termed as depreciation.