Why is depreciation charged on fixed assets?

Answer: 

Fixed assets are long-term tangible assets that businesses employ to generate revenue. Fixed assets, which have a useful life of more than one year, offer the firm with long-term financial gain. Fixed assets, often known as capital assets, are represented on the balance sheet by the term Property, Plant, and Equipment. Fixed assets are difficult to transform into cash. 

When determining the profitability of a fixed asset, the depreciation strategy must be considered. 

Fixed assets are subject to depreciation since they are used up or consumed by the business in its operations over the asset’s useful life. Fixed assets are a source of cash that is brought into the company through sales.