ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What is depreciation?
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Capital loss
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Fixed capital loss
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Consumption of fixed capital
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None
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Explanation:
Detailed explanation-1: -Consumption of fixed capital, abbreviated as CFC, reflects the decline in the value of the fixed assets of enterprises, governments and owners of dwellings in the household sector. Fixed assets decline in value due to normal wear and tear, foreseeable ageing (obsolescence) and a normal rate of accidental damage.
Detailed explanation-2: -Depreciation is also called consumption of fixed capital. Depreciation means loss of fixed assets overtime due to wear and tear.
Detailed explanation-3: -3.1 Depreciation is a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and market changes.
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