Which accounting standard governs the treatment of depreciation?

Which accounting standard governs the treatment of depreciation?

Step 1: Understand what depreciation is. Depreciation is the process of allocating the cost of a tangible asset over its useful life.
Step 2: Identify the relevant accounting standard. The standard that deals with property, plant, and equipment is IAS 16.
Step 3: Learn that IAS 16 provides guidelines on how to account for depreciation of these assets.
Step 4: Recognize that IAS 16 helps ensure that the financial statements reflect the true value of assets over time.

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