Depreciation is required because it is generally accepted that:

Question

Quizplus · Accepted Answer

Depreciation is necessary because it reflects the reality that an asset will not generate economic benefits indefinitely. As a result, the cost of the asset must be allocated over its useful life to fairly match expenses with the periods that the asset benefits the company. Wear and tear may be a factor in determining an asset's useful life, but it is not the only reason for depreciation. The value of land may indeed increase over time, but land is not depreciated since it is not a depreciable asset.

Depreciation Is Required Because It Is Generally Accepted That