And the flag C is not affected. (It's nice to meet someone who is speaking the native language of the respective microcontroller instead of using newfangled unspecific contraptions like high level languages. ;-)
@Rahis Kumar Yadav: Sorry, but that's not correct, and U. Dreher is right: Both "INC" and "DEC" cause cyclic counting, i. e. in the upward direction (INC) is the maximum value (0xFF for 8 bit) followed by the minimum value (0x00), and vice versa in the downward direction (DEC). INC and DEC work as well if you interpret the register content as two's complement numbers: Counting down, after 0 = 0x00 comes -1 = 0xFF.
P.S. @Rahis Kumar Yadav: On a second thought and reading the question again, you are right: After the execution of DEC R0 the content of the register remains 0xFF until another instruction changes it. ;-)