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Capital depreciation |
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Capital depreciationSee depreciation.Similar MatchesDepreciationDepreciationThe charge in a company's accounts which reflects the reduction in value of an asset over time as its useable life is exhausted.Depreciation is charged before calculation of profit, on the grounds that the use of capital assets is one of the costs of being in business and one of the contributors to profit.There are two main methods of depreciation:Straight line: the residual (scrap) value of the asset is deducted from its original cost, and the resultant figure is divided by the estimated life of the asset. The result of that is deducted annually over the life of the asset. So an asset that costs £10,000 and that has a residual value of £200 with a useable life of 4 years is depreciated by £2450 per year.Reducing balance: the amount of annual depreciation is a constant proportion of the cost of the asset.Depreciation has no effect on cash flow. It is just an accounting procedure. Earnings before interest, taxes, and depreciation (EBITD)Earnings before interest, taxes, and depreciation (EBITD)A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest and income taxes. Depreciation expenses are not included in the costs. Depreciation tax shieldDepreciation tax shieldThe value of the tax write-off on depreciation of plant and equipment. DepreciationDepreciation1. A fall in the value of a country's currency on the exchange market, relative either to a particular other currency or to a weighted average of other currencies. The currency is said to depreciate. Opposite of "appreciation." 2. The decline in value or usefulness of a piece of capital over time, and/or with use. Asset Depreciation Range SystemAsset Depreciation Range SystemA range of depreciable lives the IRS allows for particular classes of assets. Further SuggestionsDepreciationCapital appreciation or depreciation Declining Balance Method Of Depreciation Double declining balance depreciation method (DDB) Currency depreciation Real appreciation or depreciation Book Depreciation Accrued Depreciation Recapture Of Depreciation Double Declining Balance Method Of Depreciation Straight line depreciation Double declining balance depreciation Sum of the years digits depreciation Currency depreciation Earnings before interest, taxes, depreciation, and amortization (EBITDA) |
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