Factors that contribute to depreciation of a Fixed asset are:
- Physical deterioration/Expected physical wear and tear.
- Obsolescence/Economic factors.
- Depletion (Natural resources such as mines)
- Legal limit/Time factor.
IFRS 5 (non current asset held for sale and discontinued operation) set out the principles governing the measurement and presentation on non current asset that are expected to be realized through sale rather than through continuing use. The standard also deals with reporting the results of operations that qualify as discontinued.
The non-current asset register is the subsidiary ledger detailing the individual items of plant and equipment. The register records the cost of each asset and of any additions or alterations and the accumulated depreciation charged against it. Balances in the register reconcile with the written down value of the plant and equipment account in the general ledger.