Differentiate between depreciation and fluctuation.

| **Aspect**       | **Depreciation**                                                                 | **Fluctuation**                                                                 |
|-------------------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------|
| **Definition**    | Systematic allocation of the cost of a tangible asset over its useful life.    | Temporary rise or fall in the value of an asset due to market conditions.      |
| **Nature**        | Permanent reduction in asset value due to wear and tear, obsolescence, etc.    | Temporary change in value (can be positive or negative).                       |
| **Accounting**    | Recorded as an expense in the income statement and reduces asset value in the balance sheet. | Not recorded in financial statements; reflects market volatility.              |
| **Cause**         | Physical deterioration, technological obsolescence, or legal restrictions.      | Market demand, economic conditions, or speculative factors.                   |
| **Treatment**     | Recognized in financial statements as a non-cash expense.                     | Not recognized in financial statements; only reflected in market value.         |