Depreciation

What is Depreciation?

Depreciation is the systematic allocation of the property, plant and equipments capitalized costs to the income statement over their economic useful lives according to a pre-determined schedule. This non-cash expense is notionally a provision made for the future replacement of the property, plant and equipment which segregates a portion of the cash flows for reinvestment, preserving that sum from distributions such as dividends and taxes.

Only annual data are available.

It includes:

• Asset retirement bond;
• Exploration costs, when reported as part of depreciation;
• Depreciation of grants, when grants are related to the purchase of the asset;
• Unwinding of discount for restoration, dismantling or decommissioning costs and similar costs.