Depreciation definition

Static and Flexible Budgets Overhead cost can significantly affect the profitability of a projec t and is the only cost outside the control of the project manager. The project is expected to contribute a definite amount toward the expenses of the company and will be charged this amount even if the production rate is zero. This is the fixecTcomponent of the overhead cost and will include directly allocable costs such as depreciation and a proportion of general costs such as office salaries and heating. 

The need for pest control in tropical crops is definitely on the increase, and this is brought out in the papers of this symposium. These by no means cover this important subject. Omission of discussion of many crops from this program does not depreciate their importance, but time does not allow their inclusion. Literature on pesticide control of tropical crops is accumulating in many scattered publications—for example, tea culture has been adequately covered by Lamb and others in World Crops for May 1954. It is hoped that this symposium will pave the way for future discussions of this important subject. Pest control in tropical agriculture is a challenge to both the scientist and the manufacturing chemist. 

Other data arise as scores. These are frequently as a result of the need to provide a measure of some clinical condition such as depression or anxiety. The Hamilton Depression (HAM-D) scale and the Hamilton Anxiety (HAM-A) scale provide measures in these cases. These scales contain distinct items which are scored individually and then the total score is obtained as the sum of the individual scores. For the Hamilton Depression scale there are usually 17 items depressed mood, self-depreciation and guilt feelings, etc., each scored on a three-point scale or on a five-point scale. The five-point scales are typically scores 0 = absent, 1 = doubtful to mild, 2 = mild to moderate, 3 = moderate to severe and 4 = very severe while the three-point scales are typically 0 = absent, 1 = probable or mild and 3 = definite. 

The Canadian Income Tax Act IT-285R2 dated March 31, 1994 gives some general definitions and remarks on depreciation of property and capital cost allowance. Schedule II lists the types of property divided into classes, percentage depreciation and description of the property. Some examples are given in Table 5.4. 

A major source of new capital is from internal capital, including, primarily, undistributed profits and depreciation funds. Since this definitely is owned capital, it is not necessary to consider interest as a cost. However, some concerns prefer to assign a cost to this type of capital, particularly if comparisons of alternative investments are to be made. The reasoning here is that the owned capital could be loaned out or put into other ventures to give a definite return. 

The extent of maintenance and repairs may have an effect on depreciation cost, because the useful life of any property ought to be increased if it is kept in good condition. However, a definite distinction should always be made between costs for depreciation and costs for maintenance and repairs. 

An article by J. Linsley, Return on Investment Discounted and Undiscounted, Chern. Eng., 86(11) 201 (May 21, 1979), suggests that return on investment can be defined as net, after-tax profit plus depreciation divided by capital investment. This definition of return on investment where depreciation cash flow is included as part of the return is not used in this book, instead, this method of handling cash flow is included in the profitability methods reported for discounted-cash-flow Profitability Index and Net Present Worth. 

Income-tax effects can be included properly in all the profitability methods discussed in this chapter by using appropriate definitions of terms, such as those presented in Table 4. The methods of discounted-cash-flow rate of return and present worth are limited to consideration of cash income and cash outgo over the life of the project. Thus, depreciation, as a cost, does not enter directly into the calculations except as it may affect income taxes. 

Therefore, volatile phenols play a minor role in the aroma of most wines, and when their influence is significant in certain wines, they have mostly a negative effect, which can definitely depreciate their aroma in limit cases (phenolic off-flavors). Thus, the corresponding precursors in grape, phenolic acids, as well as the above-mentioned unsaturated lipids, are hardly taken into account to capture an essential characteristic of the varietal aroma, but to avoid their transformation into off-flavors. 

To calculate several of the cost items listed in Table 2.1, requires the depreciable and fixed capital costs. The depreciable capital cost is the capital required for equipment and its installation or modification in the process, and all the facilities required to operate the process. There is some variation in the definition of fixed capital cost. References [1-5], define the fixed capital as consisting of the depreciable capital cost, land cost, and site or land development cost. Woods [10], however, omits land cost and land development cost so that that the fixed capital cost equals the depreciable capital cost. We will adopt the first definition here. For now, assume that we know the depreciable capital cost. We will develop a procedure for its evaluation later. In Example 2.1 estimate the production cost using Table 2.1. 

Composite account depreciation, 290 Compound interest, definition of 217-218 (See also specific designation)... 

Debits in bookkeeping, 143-144 Declining-balance method for determining depreciation, 280-282 Deferred annuity, 230 Definitive estimate, 162 Deflation (see Inflation)... 

Present worth of an annuity, 228 definition of 225-226 factors for, 223n., 236-237 method for determining depreciation, 285... 

Following the above definition the gross profit excludes the depreciation. 

I refer to the National Association of Regulatory and Utility Commissioners (NARUC) which creates well-researched guidelines for regulators, such as for the critical definition and role of depreciation as a component of regulated rates. 

The payback period is the time required for the annual earnings to equal the original investment. Payback period is also called payout time, payout period, payoff period, and cash recovery period. Because it is simple and even more understandable than ROI, PBP is widely used in early evaluations to compare alternatives. Like ROI, the payback period in years has several definitions, but the following is used here. This definition is not consistent with the definition of ROI in Eq. (17.7), because only the depreciable capital is used and the annual depreciation, D, is added back to the net earnings because that depreciation is retained by file company. 

DOT (Department of Transportation), 851. 860 Double declining balance depreciation accelerated depreciation, 285 compared to other methods, 282-283. 284. 289 definition, 282 formula for, 282-283... 

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