Pepsico, Inc. uses the straight-line method of depreciation. This means that Pepsico's depreciation expense is the same every year over the life of the asset. The straight-line method is the simplest and most commonly used method of depreciation.
Pepsico's depreciation expense for 2018 was $1.796 billion. This amount was calculated by taking the cost of Pepsico's property, plant, and equipment (PP&E) and subtracting the estimated residual value. Pepsico then divided this amount by the expected useful life of the assets, which is 20 years.
The straight-line method of depreciation is the most conservative approach and results in the lowest amount of depreciation expense in the early years of an asset's life. This is because the depreciation expense is spread evenly over the life of the asset. The straight-line method is the simplest method of depreciation and is therefore the most commonly used method.
For another approach, see: Depreciation Expense Straight Line Method
Are there any drawbacks to using this method?
There are a few potential drawbacks to this method that should be considered. First, it is possible that people may feel they are being judged or evaluated based on their answers to the questions, which could lead to feelings of anxiety or stress. Additionally, if the questions are not well-designed, they may not accurately assess what the person knows or their level of understanding. Finally, this method does not allow for any back-and-forth exchange between the person being quizzed and the person conducting the quiz, so it is possible that important information or clarification could be missed.
Frequently Asked Questions
What is PepsiCo's depreciation and depletion and amortization?
The depreciation, depletion and amortization is a financial metric that measures the annual cost of owning and operating assets. These costs can include items like land, plant and equipment, intangible assets (such as intellectual property), and declines in value of those assets over time. This metric is important to track because it helps investors determine how effective PepsiCo's asset management has been.
What are the variable and fixed costs for PepsiCo?
Variable Costs: Electricity and gas. Fixed Costs: Depreciation of fixed assets, transportation costs, cost of permanent staff, rental costs
What are the administrative costs of the Pepsi company?
Depreciation costs Office expenditure (furniture and stationery costs)
What is depreciation and amortization?
Depreciation is a reduction in the value of an asset over its useful life. Amortization refers to the deduction of capital expenses, such as the cost of bought-in assets or investments, such as software over the period of their use.
What is depreciation and depreciation (dd&a)?
Depreciation and depletion are accounting techniques that companies use to gradually expense various different resources of economic value over time in order to match costs to revenues. Depreciation is the systematic expensing of an asset's physical wearing-out or loss of value over a designated period of time, typically three years for fixed assets. The depletion and amortization (dd&a) accountants subtract the book value of an asset from its carrying amount at each reporting period, then adjust the difference for any impairment charges.
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