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A company maintains a depreciation reser...

A company maintains a depreciation reserve fund for replacing its fixed assets after expiry of its life time. Can the company claim that the machines are protected against obsolescence ?

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A depreciation reserve fund is maintained to enable a company to replace its fixed assets after the xpiry of its life time. If :
(i) the obsolescence is expected then company's claim is justified.
(ii) the obsolescence is unexpected i.e., on account of natural calamities or unforeseen factors like theft etc then the company's claim is not justified.
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