Accounting Policies for Depreciation of Lufthansa and Emirates in 2013

Question: Discuss the accounting policies for depreciation of Lufthansa and Emirates in 2013? Answer: During an accounting time depreciation can be finished or used part of fixed assets. Depreciation used to get the matching principle of income which is received during accounting era with the outflow of money which incurred throughout the period. In given accounting period the part of depreciation is charged in income statement as a depreciation expense (Pohl and Pohl, 2002). Depreciation is non-cash item which diminishes the value of assets. There are various types of methodology to calculate depreciation i.e. straight Line method, weighted average value method etc used to write off an asset. (Lucey, 2005) Here, Lufthansa and Emirates value of depreciation is given in the year 2012 and 2013 was: Lufthansa: 2012: 520/ 15188*100=3.423755597 2013: 380/ 16255*100=2.337742233 Emirates: 2014: 6421/ 74250*100=8.647811448 2013: 5136/ 59856*100=8.580593424 It means Lufthansa in 2013 depreciation amount is less payable by the company as compare to year 2012. So we can say that value of assets not decline more as compare to 2012. Lufthansa has to pay less money in the year 2013 because the value of the assets is depreciated over the time. Emirates have to pay more amount of depreciation in the year 2014. it means the value of fixed or assets is depreciate more in 2014 as compare to 2013. Price of assets is traced in the balance sheet at the time of acquiring. The value of an assets declined by total collected depreciation over the horizon of time. Average life of assets = accumulate depreciation / annual depreciation expense References Lucey, T. (2005).Management information systems. London: Thomson Learning. Pohl, A. and Pohl, A. (2002).Accounting. Harlow: Pearson Education.