Welcome to Episode 15 of Easy Biz Tips! In this video, CA Deep Misra breaks down one of the most critical yet misunderstood concepts in accounting and business finance — **Depreciation**. If you’re a business owner, accounting student, finance professional, or simply someone trying to understand how assets lose value over time and how that affects your taxes and financial statements — this episode is for you.
Depreciation isn’t just a technical accounting term. It directly affects your company’s **profitability, tax liabilities, balance sheet strength, and long-term financial planning**. In this session, CA Deep Misra explains depreciation in simple, jargon-free language, making it accessible for beginners while still insightful for professionals.
You’ll learn the *meaning of depreciation**, why it occurs, and why businesses are required to account for it in their books. From there, the episode dives into the **two most common methods* used to calculate depreciation — the *Straight Line Method* and the **Written Down Value (WDV) Method**. Both methods are compared in terms of financial impact, tax implications, and their relevance for Indian businesses, startups, and SMEs.
CA Deep Misra also explains how depreciation is reflected in the *Profit & Loss Statement* and **Balance Sheet**, and how it contributes to **accurate financial reporting**. He provides real-world examples from an Indian business context and gives practical tips on which method to use based on your business model, asset type, and compliance requirements.
This episode is part of the Easy Biz Tips series, designed to make complex financial and business concepts simple for entrepreneurs, students, and anyone who wants to grow their financial literacy.
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What You’ll Learn in This Video:
What is depreciation and why is it important in accounting?
How depreciation impacts business cash flow and tax planning
The key differences between the *Straight Line* and *WDV methods*
How to decide which depreciation method is right for your business
How depreciation entries affect your Profit & Loss account and Balance Sheet
The role of depreciation in Indian tax laws and compliance (Companies Act, Income Tax Act)
Common depreciation mistakes that can affect your audits and tax filings
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Who Should Watch This:
*Small business owners and entrepreneurs* who want to manage finances more effectively
*Startup founders* building basic accounting systems
*Commerce and CA students* preparing for exams or articleship
*Finance and accounting professionals* updating their practical knowledge
*Freelancers and consultants* looking to depreciate office equipment and tools legally
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Why Depreciation Matters:
Depreciation is not just an accounting requirement—it’s a financial planning tool. It helps you allocate the cost of fixed assets (like machinery, laptops, vehicles, furniture, etc.) over their useful life, ensuring your financial statements reflect realistic values. It also provides tax benefits by reducing taxable income through allowable deductions. Choosing the right depreciation method can result in significant tax savings while maintaining audit readiness.
Whether you use accounting software like Tally, Zoho Books, QuickBooks, or Excel — understanding depreciation is a must for proper *asset management* and **financial reporting**. This video gives you practical tools and examples to apply what you learn instantly in your business.
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More from the Easy Biz Tips Series:
The “Easy Biz Tips” series by CA Deep Misra is a curated set of educational videos that simplify core accounting, taxation, and financial planning concepts for Indian businesses and startups. Other episodes cover topics like GST filing, cash flow management, business planning, tax-saving strategies, and working capital management.
New videos are added every week to help entrepreneurs, freelancers, and professionals navigate the world of business finance confidently. Subscribe to the channel and turn on the bell icon so you don’t miss future episodes.
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Engage With Us:
If you found this video helpful, please **like**, **share**, and **comment below**. What’s your experience with asset depreciation? Are you using the straight line or WDV method? Have questions about how to apply depreciation for tax filing or accounting entries?
Let’s make accounting easy — together.
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