Depreciation and amortisation
The share of fixed and intangible asset cost charged to the year.
Depreciation spreads the cost of a long-lived asset across the years it is used. It is an expense in the accounts but not a payment: the money left when the asset was bought.
So a company with heavy depreciation can show a modest profit and still generate good cash. And the reverse: a company with no fixed assets will show almost no depreciation however it is trading.
The size of the charge is tied to the non-current assets on the balance sheet — with almost none there, large depreciation is not possible.
Where this figure comes from
Row 2515 of the Statement of Financial Results (operating cost elements).
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