Right or wrong| Right | Wrong |
To invest means to spend money on something the company is going to use during several years. Classical examples of investments include buildings, computers,… If a company invests 3 million in year X, it would be unfair to completely put that amount at the expense of that same year's earnings. The profits that are calculated every year attempt to give an overview of the company's health. For that reason, an investment will not immediately be booked for its entire sum. It will be spread out over the expected duration of use. The part that is annually integrated into the calculation of the profits is the depreciation of the investment.
To invest means to spend money on something the company is going to use during several years. Classical examples of investments include buildings, computers,… If a company invests 3 million in year X, it would be unfair to completely put that amount at the expense of that same year's earnings. The profits that are calculated every year attempt to give an overview of the company's health. For that reason, an investment will not immediately be booked for its entire sum. It will be spread out over the expected duration of use. The part that is annually integrated into the calculation of the profits is the depreciation of the investment.
