Depreciation and value adjustments
The write-down of fixed assets over the reporting year.
Depreciation spreads the cost of a building, a machine or other fixed assets over their useful life. It is an expense in the accounts, not cash leaving the company that year.
High depreciation next to a small profit often means the business is still generating cash — profit has been reduced by a write-down that never hit the bank account.
Where this figure comes from
Profit and loss statement, depreciation.
Related terms