In Economic, What Is Gross Capital Formation,Depreciation And Net Capital Formation

December 1st, 2009 Comments off
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Gross Capital formation in a given period is the expenditure on fixed capital assets(buildings, plant and machinery, vehicles,etc) either for replacing or adding to the stock of fixed assets. Note that the expenditure on repairs and maintenance is excluded.

Depreciation is the fixed capital resources being used up or consumed due to wear and tear, obsolescence, etc during the year.

Net Capital formation is basically gross capital formation less the value of capital consumption or depreciation

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Financial Accounting


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