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Politics : Formerly About Advanced Micro Devices

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To: brushwud who wrote (100045)3/26/2000 7:01:00 PM
From: tejek  Read Replies (2) of 1572338
 
I just wanted to point out that depreciation is indeed an expense. Expenditures on plant and equipment which are expected to be used for more than a year are capitalized as assets on the balance sheet and depreciated year by year. It's a way of spreading the expense of a capital investment over its expected useful life even though it might have been made all at once. This accounting concept would exist even in the absence of taxes.

brushwad,

Its my understanding, however, that it is not treated as a separate expense on the Profit and Loss Statement; but rather it reflects the cost of an item to be depreciated over its useful life and is shown on the Balance Sheet as a liability. The actual item and its cost is what is shown on the P and L. Isn't that correct?

ted
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