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Financial Terms | |
Sum-of-the-years'-digits depreciation |
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Definition of Sum-of-the-years'-digits depreciationSum-of-the-years'-digits depreciationMethod of accelerated depreciation.
Related Terms:Accelerated depreciationAny depreciation method that produces larger deductions for depreciation in the accelerated depreciation(1) The estimated useful life of the fixed asset being depreciated is Accelerated depreciationAny of several methods that recognize an increased amount Accumulated depreciationA contra-fixed asset account representing the portion of the cost of a fixed asset that has been previously charged to expense. Each fixed asset account will have its own associated accumulated depreciation account. accumulated depreciationA contra, or offset, account that is coupled Accumulated depreciationThe sum total of all deprecation expense recognized to date Average Propensity to ConsumeRatio of consumption to disposable income. See also marginal propensity to consume. ![]() Capital Consumption AllowanceSee depreciation. Consumer creditCredit granted by a firm to consumers for the purchase of goods or services. Also called Consumer Credit Protection ActA federal Act specifying the proportion of Consumer Price Index (CPI)The CPI, as it is called, measures the prices of consumer goods and services and is a Consumer Price Index (CPI)An index calculated by tracking the cost of a typical bundle of consumer goods and services over time. It is commonly used to measure inflation. Consumption FunctionThe relationship between consumption demand and disposable income. More generally, it refers to the relationship between consumption demand and all factors that affect this demand. DepreciationA non-cash expense that provides a source of free cash flow. Amount allocated during the DepreciationA technique by which a company recovers the high cost of its plant-and-equipment assets gradually during the number of years they’ll be used in the business. depreciation can be physical, technological, or both. DepreciationAn expense that spreads the cost of an asset over its useful life. ![]() depreciationRefers to the generally accepted accounting principle of allocating DepreciationReduction in value of fixed or tangible assets over some period DepreciationBoth the decline in value of an asset over time, as well as the gradual Depreciationa) Of capital stock: decline in the value of capital due to its wearing out or becoming obsolete. DepreciationThe systematic and rational allocation of the cost of property, plant, and equipment DepreciationAmortization of fixed assets, such as plant and equipment, so as to allocate the cost over their depreciable life. Depreciation AllowancesTax deductions that businesses can claim when they spend money on investment goods. Depreciation expenseAn expense account that represents the portion of the cost of an asset that is being charged to expense during the current period. Depreciation tax shieldThe value of the tax write-off on depreciation of plant and equipment. depreciation tax shieldReduction in taxes attributable to the depreciation allowance. Double-declining-balance depreciationMethod of accelerated depreciation. Earnings before interest, taxes, depreciation and amortization (EBITDA)The operating profit before deducting interest, tax, depreciation and amortization. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working EBDDT - Earnings before depreciation and deferred taxesThis measure is used principally by Economic assumptionsEconomic environment in which the firm expects to reside over the life of the Homogenous expectations assumptionAn assumption of Markowitz portfolio construction that investors Marginal Propensity to ConsumeFraction of an increase in disposable income that is spent on consumption. reinvestment assumptionan assumption made about the rates of return that will be earned by intermediate cash flows from a capital project; NPV and PI assume reinvestment at the discount rate; IRR assumes reinvestment at the IRR Straight line depreciationAn equal dollar amount of depreciation in each accounting period. STRAIGHT-LINE DEPRECIATIONA depreciation method that depreciates an asset the same amount for each year of its estimated straight-line depreciationThis depreciation method allocates a uniform straight-line depreciationConstant depreciation for each year of the asset’s accounting life. SUM-OF-THE-YEARS’ DIGITSAn accelerated depreciation method that makes the sum of the digits in an asset’s expected Summarized bill of materialsA bill of materials format showing the grand total tax benefit (of depreciation)the amount of depreciation deductible for tax purposes multiplied by the tax rate; tax shield (of depreciation)the amount of depreciation deductible Zero-sum gameA type of game wherein one player can gain only at the expense of another player. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |