In case of Hire purchase, the depreciation is calculated on -

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Depreciation on an asset acquired through hire purchase is calculated on its cash price, which represents the asset's fair value or the amount it would cost if paid in cash upfront. This is because depreciation is meant to reflect the wear and tear or usage of the asset over time, based on its original value, not the total amount paid over time which may include interest and other charges.

In Case of Hire Purchase, the Depreciation Is Calculated on -