The causes of depreciation are as follows:
Use of asset: Because of constant use of the fixed assets there exists normal wear and tear which leads to a fall in the value of the assets.
Passage of time: Whether assets are used or not, with the passage of time, its effective life will decrease.
Obsolescence: Because of new technologies, innovations, and inventions, assets purchased currently may become outdated later which leads to the obsolescence of fixed assets.
Accident: An asset may lose its value due to mishaps such as a fire accident, theft, or natural calamities and they are permanent in nature.