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@api.depends is used for functional fields, where the function calculate the value and store it. If the function use any other field value for calculation then we can write that field in @api.depend decorator. i.e, the fuction calculation depends up on other field value. For example, in salary calculation function we use HRA, TA, DA etc,. So here we use a functional field for salary calculation and we know that the calculation depends on HRA, TA, DA etc, so we write that fields in @api.depends decorator.

In odoo 7 we used onchange attribute in xml, that will replaced by the @api.onchange decorator in odoo8. Here we just write the decorator with field and the functionality is written below the decorator. If the field value changes in form view then the function is called.