How will depreciation affect PAT?

Question Posted / avinash

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How will depreciation affect PAT?..

Answer / santosh kalburgi

PAT is the result of the profit reduced by depreciation,
interest and then tax. The depreciation saves the company's
money in terms of tax shield on Depreciation. When the
company shows the depreciation the profit reduces to that
extent, and so when that remaining income is taxed, tax
amount to the extent of depreciation gets saved.

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How will depreciation affect PAT?..

Answer / dayal singh

it will save ur profit which is to be distributed

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0 No

How will depreciation affect PAT?..

Answer / vijay nimhan

PAT is known as profit after tax.if depreciation is not
reduced the PAT gets increase and it shows wrong net
profit.

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4 Yes

1 No

How will depreciation affect PAT?..

Answer / hemanth.batchu

Most of the people think that if depreciation will increast
the profits and the reduce the taxes but strictly speaking
it wount, if we brought a asset worth of 100 crore this
year or next year we have to get the full amount before it
will die,Bcos to buy new one. so depreciation will help the
company acc to show when ever they want to show. the
relation ship is vise versa

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