why is that depreciation is charged to profit& loss account?

Question

while preparing profit & loss account why depriciation is taken into p&L account?whats the reason behind it?

Answer 1

Depreciation is the concept of recognising that an asset is being used up as time goes by. An asset is subject to wear and tear as it's being used, and one fine day it will not work anymore. Depreciation is an expense to recognise the continuous usage of the asset.

Here are a couple of sites to illustrate the concept in greater detail.

Introduction to Depreciation -
Buildings, machinery, equipment, furniture, fixtures, computers, outdoor lighting, parking lots, cars, and trucks are examples of assets that will last for more than one year, but will not last indefinitely. During each accounting period (year, quarter, month, etc.) a portion of the cost of these assets is being used up. The portion being used up is reported as Depreciation Expense on the income statement (aka profit and loss statement). In effect depreciation is the transfer of a portion of the asset's cost from the balance sheet to the income statement during each year of the asset's life.

Click on the links for more explanations of depreciation

Answer 2

So it can then be deducted from the cost which calculates accumulated depreciation from all of the years that the company had depreciation from YTD (year to date)

Answer 3

it is like cost recovery. normally government allow it as incentive to business owner; either paying less tax or allow CAPEX to be recovered.