Causes of Depreciation in Non-Current Assets

Steps:

• Identify depreciation as the allocation of an asset's cost over its useful life due to factors reducing its value.
• Evaluate option 1: Market value changes reflect fair value adjustments, not systematic depreciation causes.
• Evaluate option 2: Technological changes cause obsolescence, accelerating depreciation but not the primary accounting trigger.
• Evaluate option 3: Repair changes indicate physical wear and tear, directly causing depreciation through usage decline.

Why D is correct:

• Depreciation arises from physical deterioration like repair needs, per IAS 16, which allocates cost based on usage and maintenance impacts.

Why the others are wrong:

• A: Includes market value (1), an impairment factor, not depreciation cause.
• B: Market value (1) alone is unrelated to depreciation's systematic nature.
• C: Includes technology (2), an obsolescence driver, but ignores repair's core role in physical depreciation.

Final answer: D