28.04.2012
depreciation is part of operating expenses
Popoola
Neither. Depreciation is a non-cash expense.
Non-Operating Expense
yes, under operating expenses
Depreciation is a non-cash expense that matches the income generated by an asset or its useful life. When creating a statement of cash flows depreciation expense is the first item added back in.
An expense.
is depreciation expense a non-cash expense
Depreciation is an operating expense but does not involve any cash flow. like salaries,rent insurance etc it is included in the P/L accounts.It is considered as operating because machinery/equipments or any property diminishes its value day by day.
Neither. Depreciation is a non-cash expense.
Indirectly. Technically it doesn't, depreciation is a non-cash expense. Depreciation expense does, however show up as a line item on the cash flows statement as an adjustment to operating income to derive net cash from operations... you add it back to income.
Indirectly. Technically it doesn't, depreciation is a non-cash expense. Depreciation expense does, however show up as a line item on the cash flows statement as an adjustment to operating income to derive net cash from operations... you add it back to income.
Examples of operating expense ==> depreciation expense of a machine, impairment of goodwill Example of selling expense ==> advertising Example of general administrative expense ==> office expense
Non-Operating Expense
Non-operating I believe, because they are non-recurring
Depreciation does not create cash flow. It is a non-cash expense.
yes, under operating expenses
Operating Activity
Depreciation is added back to net income to arrive on cash flow from operating activities because depreciation itself don't cause any inflow or outflow of cash that's why it is added back to net operating income.