What factor contributes to the depreciation of an item of equipment?

The depreciation of an item of equipment is primarily influenced by wear and deterioration. As equipment is used over time, it naturally experiences wear due to mechanical stresses, usage patterns, and environmental factors. This deterioration reduces the remaining useful life of the equipment and affects its resale value.

Additionally, wear and deterioration can impact operational efficiency and performance, leading to higher maintenance costs and possibly requiring replacement sooner than anticipated. This relationship between the physical condition of the equipment and its value is a critical principle in finance and accounting related to asset management.

While other factors may influence market value or potential sales, it is the physical wear and condition of the equipment itself that primarily leads to its depreciation over time.