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depreciation |
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a reduction in value of an asset
COMMENT: Publishers often write down the value of their stocks on the assumption that a book which is several years old is not likely to sell well, and unsold stock is therefore less valuable. Depreciation has the effect of reducing profits in the year in which it is carried out, and increasing profits in subsequent years as the depreciated stock continues to sell. Depreciation does mean that stock can be remaindered without loss. |
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