Nature of account

Provision for depreciation is valuation account or special account

It is a credit balance

But not a nominal account or liability account

But it is reduced from fixed asset in the balance sheet as per account standard 10

OMG again this topic started again- Provision for depreciation and its horrible because not a single masters text book holds this info

1. One provision for depreciation account is opened for every fixed asset account. Thus if there is a motor vehicle account, there will be opened a “provision for depreciation on motor vehicle account”. Similarly, in respect of plant and machinery, there will be a “plant and machinery account” and also one “provision for depreciation on plant and machinery account”.
2. At the end of each financial year, we debit the depreciation expense account and credit the provision for depreciation (on relevant fixed asset account) with the amount of depreciation calculated for the year.
   Dr. the depreciation expense account
   Cr. the provision for depreciation on the relevant fixed asset
3. The balance in depreciation expense account is transferred to the profit and loss account at the end of the year.
4. The balance of the provision for depreciation account is carried forward to the next year. Note that the provision on depreciation account is not a nominal account, it is a part of the asset account. Also note that it will always show a credit balance and that its balance will increase each year. At any given time, the balance on provision for depreciation account represents the total accumulated depreciation that has been provided against the particular asset.

This can also be called as accumulated depreciation account. https://www.playaccounting.com/explanation/depreciation-and-disposal-of-fixed-assets/provision-for-depreciation-account/