Depreciation occurs due to wear and tear, usage, and obsolescence of assets over time. It is a non-cash expense that is calculated using methods like straight-line and diminishing balance to determine the reduced value of assets. Depreciation is important for calculating true profit and loss, cost of production, asset valuation, and replacement of assets. The document analyzes depreciation costs for major Indian steel companies like Tata Steel, JSW Steel, and Visa Steel over multiple years using data from their financial statements. It shows the percentage of depreciation on total assets and how company revenues would increase without depreciation expenses each year.

1. Business Finance
Depreciation Cost in Steel Industry
Presented By:-
Dipanway Bhabuk

2.  During 2012, India maintained its ranking as the 4th largest steel
producing country in the world behind China, Japan and the US with a
crude steel production of 76.7 million tonnes (MT) representing a 4.3%
growth over 2011.
Steel Industry In India

3.  As per official estimates, the Iron and Steel Industry contributes around
3 per cent of the Gross Domestic Product (GDP). From a negligible
global presence, the Indian steel industry is now globally acknowledged
for its product quality.
 The table below shows the trend in production for sale, import, export
and real consumption of total finished steel (alloy + non-alloy) in the
country:
Gross Domestic Product
Data source page 19

4.  Depreciation is a non-cash expenses that reduces the value of an assets over
time.
 Methods of Depreciation:-
 Straight Line Method:- This method is used when the assets generates
revenue that are equal or very close to equal over its useful life.
Calculation:- Total Cost – Residual Value
Useful Life
 Diminishing Balance Method:- This method is used when the assets revenue
decreases over its useful life.
Calculation:- (Total Cost – Accumulated Depreciation) * Depreciation Rate
Depreciation

5. Why
Where
Depreciation
Purpose
Why, Where and Purpose of
Depreciation
Depreciation occurs due to
wear and tear, usage,
obsolescence through
technology.
Tangible & Intangible
Assets
Ascertainment of True Profit & Loss,
Cost Of Production,
Valuation of Assets,
Replacement of Assets

6. TATA STEEL 2014-13 2013-12 2012-11
Total revenue 42,498.67 39,101.47 34,819.89
Total Assets 24,064.43 24,650.54 11,142.36
Depreciation 1,780.00 1,568.80 1,095.83
Percentage of Depreciation on Total Assets 7.40 % 6.36 % 9.83 %
Percentage Increased in Total Revenue without
Depreciation
1.04 % 1.04 % 1.03 %
Depreciation of TATA STEEL
EXCEL WORK
(Rupees in Crores)

7. JSW STEEL 2014-13 2013-12 2012-11
Total revenue 42,498.67 35,491.81 32,122.66
Total Assets 37,225.12 27,604.47 27,071.63
Depreciation 2,725.88 1,973.89 1,708.17
Percentage of depreciation on Total Assets 7.32 % 7.15 % 6.31 %
Percentage Increased in Total Revenue without
Depreciation
1.06 % 1.06 % 1.05 %
Depreciation of JWS STEEL
EXCEL WORK
(Rupees in Crores)

8. VISA STEEL 2014-13 2013-12 2012-11
Total revenue 5,325.50 8,156.20 13,328.79
Total Assets 9,598.81 7,807.30 7,706.60
Depreciation 519.15 382.57 380.92
Percentage of depreciation on Total Assets 5.41 % 4.90 % 4.94 %
Percentage Increased in Total Revenue without
Depreciation
1.10 % 1.05 % 1.03 %
Depreciation of VISA STEEL
EXCEL WORK
(Rupees in Crores)

9. TATA STEEL JWS STEEL VISA STEEL
2013-14 7.4 7.32 5.41
2012-13 6.36 7.15 4.9
2011-12 9.83 6.31 4.94
0
2
4
6
8
10
12
PercentageofDepreciation

10.  Book:-
• Management Accounting & Financial Management- Ravi
Kishore
 Internet :-
 www.tatasteel.org
 www.jwssteel.org
 www.visasteel.org
 www.steelindia.goc.in
 www.wikipedia.org
Biblography