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When you buy a plant or equipment, it will lose value over time - it's breaking down or it's not as efficient or the such; this gradual decline in worth of the capital is depreciation.
What else can I help you with?
How does depreciation affect the cost of capital?
Please refer to the following Web site for a complete explanation on how depreciation affects the cost of capital: http://en.wikipedia.org/wiki/Depreciation
Gradual wear on capital goods?
depreciation
Is depreciation included as a cash flow in capital budgeting?
No depreciation is not included as depreciation is allocation of part of assets cost to income statement while in capital budgeting, full cost of asset is already included so if depreciation will also be included then there would be double counting of same asset.
What is depreciation of capital?
When you buy a plant or equipment, it will lose value over time - it's breaking down or it's not as efficient or the such; this gradual decline in worth of the capital is depreciation.
What is the Difference between accumulated depreciation and depreciation?
Depreciation expense is a nominal account which will goin to net income at the end of term. Accumulated depreciation is a contra account with capital assets which shows up in balance sheet.
Why is depreciation always positive on a cash flow statement?
depreciation is a source of cash. because we charge depreciation in profit and loss but we added back in cash flow. remember one thing that capital expenditure= amount of depreciation
Can depreciation be charged on capital work in progress. Give reasons?
no depriciation is usually not charged on capital WIP
What are the examples of capital contra account?
is accumulated depreciation a contra account
What is GDP minus capital depreciation?
Net Domestic Product NDP
When will a nation's capital stock decline?
when depreciation exceeds gross investment
What is reserve depreciation?
Accumulated depreciation which is not shown in income and expenditure account as expenditure and the same is included in the net profit and shown separately as depreciation reserved fund while adding it in the capital fund.
Can depreciation be charged on capital work in progress?
No, depreciation cannot be charged on capital work in progress (CWIP) because depreciation is applied to assets that are completed and ready for use. CWIP represents costs incurred for assets that are not yet finished, meaning they have not been placed into service. Once the construction or development is completed and the asset is put into use, depreciation can then be applied.
