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Technology Stocks : Intel Corporation (INTC)
INTC 35.81+0.2%Nov 25 3:59 PM EST

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To: GVTucker who wrote (174340)5/2/2003 4:56:31 PM
From: The Duke of URLĀ©  Read Replies (2) of 186894
 
It's still BS. Depreciation is not a cash expense. It certainly is an inaccurate estimation of a legitimate expense. And yet Mr. Barrett still signs off on income statements with depreciation as part of the expenses. If

Bad example. and Stock options are not an expense of the company. They are an expense of the shareholder. It is the shareholder who is giving up a portion of what he has.

Depreciation is nothing if it is not a cash expense. Money, debt or otherwise is used to buy an asset. Depreciation is nothing more that the recordation of that cash expense over the useful life of that asset. Nothing is expensed at purchase. It is all expensed ratable over the assumed useful life of the asset. Salvage value is nothing more than a reduction or recoupment of that actual cash expense.

This is NOT an accounting problem. The is a theoretical TAX and asset policy question better left to tax attorneys who are steeped in the jurisprudential and philosophical problems of recounsiling true profit with tax profit.

CPA'S: DO NOT TRY THIS AT HOME!!!
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