Hi,
that would be an accounting view (investment going to the BS and then depreciating in the IS).
But when you look at NPVs you just look at cash outlays, e.g. investment in Year0 and fixed + variable cost in year 1,2,3 ...
Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Interview Partners to connect and practice with!
Back to overview
24
Why aren't investment costs included in fixed cost in a form of amortization or depreciation costs
2
2.7k
Be the first to answer!
Nobody has responded to this question yet.
Hi there,
I guess that"s somewhat a matter of accounting definitions. As a general rule costs get recorded in the P&L and Investments in the balance sheet. Investments can be depreciated over a number of years to recognise their loss of value with the time. Costs are directly recognised as incurred in the P&L.
I hope this helps.
Best, Fernando
