Economic depreciation

Economic depreciation

In economics and accounting, "economic depreciation" is seen as the change in the "market" value of capital over a given period. It is calculated as the market price of the capital at the beginning of the period minus its market price at the end of the period.

Such a method in calculating depreciation differs from other methods, such as straight-line depreciation in that it is included in the calculation of implicit cost, and thus economic profit.

ee also

* Implicit cost
* Economic profit


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