Question

Distinguish between depreciation and capital loss.

Answer 1

	Depreciation	Capital loss
1.	It refers to the fall in the value of fixed assets due to normal wear and tear & accidental damages and expected obsolescence.	It refers to the fall in the value of fixed assets due to natural calamities and economic recession.
2.	It is managed through a depreciation reserve fund.	It is managed through the insurance of fixed assets.