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Consumption of fixed capital (CFC) is a term used in business accounts, tax assessments and national accounts for depreciation of fixed assets. CFC is used in preference to "depreciation" to emphasize that fixed capital is used up in the process of generating new output, and because unlike depreciation it is not valued at historic cost but at current market value (so-called "economic depreciation"); CFC may also include other expenses incurred in using or installing fixed assets beyond actual depreciation charges. Normally the term applies only to ''producing'' enterprises, but sometimes it applies also to real estate assets. CFC refers to a depreciation charge (or "write-off") against the gross income of a producing enterprise, which reflects the decline in value of fixed capital being operated with. Fixed assets will decline in value after they are purchased for use in production, due to wear and tear, changed market valuation and possibly market obsolescence. Thus, CFC represents a ''compensation'' for the loss of value of fixed assets to an enterprise. According to the 2008 manual of the United Nations System of National Accounts, CFC tends to increase as the asset gets older, even if the efficiency and rental remain constant to the end. The larger the depreciation write-off, the larger the gross income of a business. Consequently, business owners consider this accounting entry as very important; after all, it affects both their income, and their ability to invest. ==Valuation== How much the depreciation charge actually will be, depends mainly on the depreciation rates which enterprises are ''officially permitted'' to charge for tax purposes (usually fixed by law), and on how fixed assets themselves are ''valued'' for accounting purposes. This makes the assessment of CFC quite complex, because fixed assets may be valued for instance at: *historic (acquisition) cost *operating value (as part of a "going concern") *accrual value *current average sale-value in the market *current replacement cost *cash value *economic value *insured value *scrap value *deflated value (allowing for price inflation) By how much then, do fixed assets used in production truly ''decline'' in value, within an accounting period? How should they be valued? This can be arguable and very difficult to answer, and in practice, various conventions are adopted by accountants and auditors within the framework of legal rules and economic theory. In addition, the depreciation schedules imposed by tax departments may ''differ'' from the ''actual'' depreciation of business assets at market rates. Often, governments permit depreciation write-offs ''higher'' than true depreciation, to provide an incentive to enterprises for new investment. But this is not always the case; the tax rate might sometimes be lower than the real market-based rate. Furthermore, businesses might engage in creative accounting and deliberately state their assets and liabilities held at a balance date, or interpret the figures in some other way, to increase the amount of depreciation write-offs, and thus boost their income (how this is done will depend a lot on tax law). For all these reasons, economists distinguish between different kinds of depreciation rates, arguing that the "true" consumption of fixed capital is really the ''economic'' depreciation, assessed by relating financial data to mathematical models, to arrive at a figure that "seems credible". The economic depreciation rate is based on observations of the average selling prices of assets at different ages. The economic depreciation rate is therefore a market-based depreciation rate, i.e. it is based on what an asset of a given age would currently sell for in the market. 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「consumption of fixed capital」の詳細全文を読む スポンサード リンク
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