Depreciation deductions: definition, role

Depreciation is the process of transferring the value of fixed assets used in production to manufactured products. Basic means not only the means of production that are directly involved in this process. Their number also includes buildings, structures used in production, vehicles involved in the transportation of goods, workers, service equipment, the service life of which provides for the operation of more than one year and the cost exceeding 100 minimum wages. Objects that are not subject to depreciation are those, the properties and characteristics of which do not change over time. In particular, these are land and nature management zones. Depreciation charges play an important role in the development of the economy, as they are the main financial sources of investment. The value of such deductions on the scale of the company is expressed in the fact that it contributes not only to a streamlined process of simple reproduction, but also is a prerequisite for an expanded one. According to some financiers' data, it is these deductions that satisfy the needs of enterprises in investment funds by 70 - 80%. Due to the fact that depreciation charges are the company's own funds, they have a significant advantage over other types of investment sources. Changes in macroeconomic proportions are reflected in the relationship between accumulation, investment and replacement. In this regard, it is legitimate to talk about the separation of the rate of movement of deductions for depreciation from the rate of circulation of fixed capital.