The cost of providing fixed assets should be charged against profits over the useful life of the assets.
Cost is allocated over the life of an asset by charging depreciation. This can be calculated in several ways, the most common being straight line and reducing balance methods.
Separate ledger accounts are kept to record the accumulated depreciation on different classes of assets.
When an asset is disposed of, any figures relating to it must be removed from the asset accounts.
In stating fixed assets in the balance sheet at their written down value, several accounting concepts, conventions and desirable qualities are being applied.