L6: Depreciation and Amortisation Flashcards
1
Q
What can happen to assets as they get older?
A
Reduced earning capacity, obsolescence, physical deterioration
2
Q
In what way does depreciation change financial statements?
A
No change to cashflow but does change profit/loss
3
Q
What is the book value of an asset?
A
The value after k periods
4
Q
How is the sinking fund value increased?
A
The fund is invested
