The Factors determining amount of depreciation are Cost, Useful Life, Net Realizable Value and Depreciable cost
| Cost | Useful Life | Net Realisable Value | Depreciable Cost |
| Cost of a fixed asset is “the total cost spent in connection with its acquisition, installation and commissioning as well as for add item or improvement of the depreciable asset”. | Useful life of an asset is the “period over which it is expected to be used by the enterprise”. | The amount which the used fixed assets would fetch if sold after its useful life period. | Depreciable cost of an asset is equal to its cost less net residual value which is distributed and charged as depreciation expense over the estimated useful life of the asset |