Group depreciation

Group depreciation

Method of depreciation where a single average depreciation rate is applied to a group of similar assets with similar service lives. See also Composite depreciation.
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As a result of the continuous expansions, the group depreciation and amortization was recorded at Rs.
that have large unit costs and are comparatively few in number," and that "group depreciation usually is applied to groups of assets that are significant in number but have relatively small unit values." In practice, group depreciation is commonly used for such things as manufacturing facilities and hotels, and groupings may be by any logical categories, such as year of acquisition, by specific type of asset or classification (e.g., all machinery), by location, or by a combination of these.
Composite or group depreciation has been a practical alternative to depreciating individual assets by components (unit or "component" depreciation), which is generally preferable when there are large variances in actual economic useful lives among the assets.
It appears that component depreciation is not an alternative to group depreciation, but rather may be used in combination with either group or unit depreciation techniques.
The standards also permit continued use of the composite or group depreciation methodology and are effective for periods beginning after September 30, 2002.