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Appreciation and depreciation both deal with asset value over time. Some assets, such as real estate, bonds, and homes gain value as time goes on. These assets are said to appreciate. Other assets, such as vehicles, manufacturing plants, and office equipment lose value over time (depreciate). Appreciation/depreciation as a verb is the process of increasing value. For instance, a piece of real estate might appreciate at 5% per year and a car might depreciate 10% a year. De/Appreciation do NOT have to be linear. For instance, the moment you drive a new car off the lot, it depreciates a considerable amount (say 10% of its value). The next year, though, the car might only depreciate 5%. How one determines the rate of de/appreciation depends on your accounting rules. For tax reasons, many companies have to abide by strict depreciation laws (For instance, it would be unreasonable to depreciate a factory at 90% of it's value in one year because it would effects the company's profits and thus the taxes that company pays).
For most consumers, de/appreciation is based on the market value of the asset. Back to the car example: the moment a new car is driven off the lot, it loses a lot of its value because it is then consider a "used" car, so people won't pay as much for it.
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What is the difference between investment and net investment?
"Net investment" deducts depreciation from gross investment. Net fixed investment is the value of the net increase in the capital stock per year.
What happens to accumulated depreciation when a piece of equipment is sold Does it go up or down or is it not affected?
The accumulated depreciation relating to the piece of equipment will be eliminated from the accounts when the company disposes of the asset. The double entry for the sale of a piece of equipment would be-DR Cash/Bank (with the proceeds)DR Accumulated depreciation (with the total depreciation held for that asset)CR Equipment (with the original cost of the equipment)DR/CR Profit/loss on disposal (with the difference between the proceeds and the NBV of the asset at the time of sale).
What is the difference between depreciation expense and accumulated depreciation?
Depreciation is a tax write off example you purchase a property for $100,000 you can't depreciate land but you can the structure about 80% that is $80,000 over a period of 27.5 yrs in round figures that is about $2900 yr. If you are in a 20% tax bracket it is a savings of approx $580 in taxes. There are other things to take into consideration so take with your accountant. Accumulated depreciation is what you accumulate over the holding of the investment and when you sell the investment it is added back as if income or a lost depending on the sale price .
What is the difference between stock appreciation rights and phantom stock?
A holder of SAR's is not entitled to dividends/distributions, whereas...a holder of phantom stock will be entielted to an equivalent dividend/distribution payment.
What is the difference between center and middle?
Is the same as the difference between middle and center
What is the difference between currency depreciation and appreciation?
depreciation is the reduction in the value of an asset due to usage, passage of time, wear and tear, technological outdating or obsolescence, depletion, inadequacy, rot, rust, decay or other such factors. Appreciation is a term used in accounting relating to the increase in value of an asset.
Differences between currency depreciation and apreciation?
Devaluation and depreciation are often interchangeable, although there is a subtle difference. Devaluation refers to changing the value of a currency in a fixed exchange rate, while depreciation is decreasing the value in a floating exchange rate.
The difference between the cost of an asset and the accumulated depreciation for that asset is called?
Book Value is the difference between the cost of an asset and the accumulated depreciation of that asset.
What is the difference between depreciation and accumulated depreciation?
Depreciation is for a particular year (say for Year 3). Accumulated depreciation is the aggregate of depreciation from the beginning (say from Year 1 to Year 3)
How do you account difference between depreciation as book and depreciation as tax?
This will be found under "deferred taxes" on the income statement.
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.
The difference between the balance of a fixed asset account and the related accumulated depreciation account is termed?
Net Fixed Assets is the term used for the difference between the balance of a fixed asset account and the related accumulated depreciation.
What is the difference between accounting depreciation and tax depreciation?
In accounting, depreciation is an allocation of a previous expenditure, while in economics depreciation represents a decline in current value.
What is the difference between depreciation and depletion?
Depreciation refers to the reduction in value of an item after some time. On the other hand, depletion is the exhaustion of materials that might not have a way of renewal.
The difference between the balance of a fixed asses account and the related accumulated depreciation account is termed?
Book Value
What is the difference between gross and net dscr?
Gross DSCR= Cash accruals ( Profit after tax + Depreciation) + Interest ----------------------------------------------------------- Installments of loan + Interest Net DSCR = Cash Accruals (PAT + Depreciation) -------------------------------------- Installments
What is the difference between gross private domestic investment and net private domestic investment?
is net invesment = gross investment - depreciation
