CAPITAL CONSUMPTION

The wearing away of capital stock due to physical destruction or erosion through the ravages of time and through the use of the asset in production, plus the complete withdrawal of capital assets from capital stock (scrappage). Depreciation is more general, in that it is the fall in the price of a capital asset as it ages. Depreciation includes capital consumption, and it also includes revaluation, which consists of pure inflation and obsolescence.


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