Importance The article examines the economic substance of the accounting concept of depreciation and historical review of the concept origination and development. Objectives I analyze the historical experience and views on depreciation as an accounting item, various viewpoints on depreciation charges in terms of capital, fund, reserve and a regulatory item of the balance sheet. Methods The methodological framework is based on proceedings of renowned Russian and foreign scholars who worked in early 20th century, determined the role and significance of depreciation for accounting purposes. The reliability of my findings is proved with such methods as analysis, synthesis, observation, comparison, and logic summary. Results As an accounting concept, depreciation constitutes a process of allocating costs incurred to acquire depreciable items throughout reporting periods. Most authors agreed a separate account of depreciation charges was needed to recognize property depreciation. Depreciation and wear and tear were charged during the socialism development to form depreciation fund as a source of reproducing fixed assets. Conclusions and Relevance As for accounting of PP&E depreciation, our country returned to the accounting principles, which had been applied before the 1917 October Revolution. The findings can be used to give lectures on the theory and history of accountancy, and further elaborate the subject.
Keywords: depreciation, concept, accounting, history, development
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