It is not possible to apply usual methods of depreciation outlined above in respect of certain assets such as hand tools and other portable equipment of small size and low unit price and even livestock, i.e., working animals. In these cases valuation is made at the year-end by treating fixed asset in the same way as stock. The compulsions of doing so are obvious in the nature of the assets. For example, it would be extremely difficult to assess the extent of benefit derived from the use of a hammer or dyes during the year. Moreover, small items are subjected to hard usage, breakage and pilferage and are therefore short-lived and require frequent replacements. It would be very costly record depreciation of individual items especially when hundreds of such items are being used. Consequently, a valuation is done at the beginning and at the end of the year and the difference is treated as cost or depreciation expense.

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