II The Purpose o f Measuring Depreciation All the problems of measuring depreciation which this chapter discusses arise out of the fact that “ the value of an asset” is not a unique quantity. An asset has different values for different purposes, so we get different amounts of depreciation according to the purpose of our measurement. In practice, depreciation is measured for four different purposes, which may well yield answers: (a) In order to compute tax liability. (b) In order to decide for how much to buy or sell the asset in the second
hand market. (c) In order to decide what part of the gross profit to distribute to the
owners of the business. (d) In order to decide how much to charge the consumers of the product.