Your question:
Several of our analysts believe that 179 deductions should be treated like depreciation because it is an election to take the expense rather than capitalize the expenditure and depreciate the asset over time. I disagree and believe that adding it back may overstate cash-flow. What do you think?
Linda says:
You have stumbled across the weakness in adding back ANY depreciation...that even though depreciation does not represent an outlay of cash, they DO pay for the equipment, vehicles and the like. It takes cash out flow at some point.
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