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Depreciation tax shield |
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Depreciation tax shieldThe value of the tax write-off on depreciation of plant and equipment.Depreciation tax shield 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. Currency depreciationCurrency depreciationA decline in the value of one currency relative to another currency. Depreciation occurs when, because of a change in exchange rates, a unit of one currency buys fewer units of another currency. Real appreciation or depreciationReal appreciation or depreciationA change in the purchasing power of a currency. Asset Depreciation Range SystemAsset Depreciation Range SystemA range of depreciable lives the IRS allows for particular classes of assets. Accrued DepreciationAccrued Depreciation(1) The amount reserved each year in the accounting system for replacement of a building or other asset. (2) The useful life of a property at any given time. Further SuggestionsDepreciationDepreciation Capital appreciation or depreciation Earnings before interest, taxes, depreciation, and amortization (EBITDA) Capital depreciation Currency depreciation Earnings before interest, taxes, and depreciation (EBITD) Double declining balance depreciation method (DDB) Book Depreciation Double declining balance depreciation Recapture Of Depreciation Declining Balance Method Of Depreciation Sum of the years digits depreciation Straight line depreciation Double Declining Balance Method Of Depreciation |
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