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D-depreciation Dictionary

Depreciation

The yearly loss in value of a machine or building, treated as a cost

All termsIntroduced in Module 3Open the Toolkit
An open dictionary on a farm office desk
Plain meaning
The yearly loss in value of a machine or building, treated as a cost
How to use it
Spread the cost of each machine or building over its working life and include the yearly amount as a cost. A budget that ignores depreciation overstates profit.
South African benchmark
Concept term; South African enterprise budgets include depreciation on machinery and buildings.
Country notes
Applies the same way in all five markets.
Go and read
C3 Lesson 3.2
Calculate it
T-C-02 Start-Up Capital Calculator
Library sources
LIB-A015, LIB-A140
See also
Payback period, Mechanisation as a service
Bar diagram of break-even yield, yield achieved and yield achievable, showing the yield gapThe yield gap on one hectareBreak-even yieldcovers all costsYield achievedwhat the farm gets nowYield achievablebest practice on this landBreak-even lineYield gap= money leftin the field
From Module 3, Productivity Economics, where this term is introduced.

Introduced in C3 Productivity Economics.