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FORMING THE OPTIMAL DEPRECIATION POLICY OF AN ENTERPRISE IN A DOWN ECONOMY

Journal: The Way of Science (Vol.1, No. 36)

Publication Date:

Authors : ;

Page : 121-123

Keywords : depreciation; depreciation policy; depreciation rate; useful life of assets; standard operation time.;

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Abstract

The influence of depreciation policy on the cost structure of enterprise is rather contradictory. On the one hand, the higher the amount of depreciation allowances, the bigger the enterprise's opportunities for renovation of production and for investment and capital contributions. On the other hand, depreciation is an element of product cost, which is, in its turn, an element of price and the determining factor of competitive capacity of an enterprise. In view of such complex and contradictory influence of depreciation allowances on the results of activity, there is the necessity for optimization of depreciation policy at an enterprise.

Last modified: 2017-06-07 20:15:37