Vol. 538 No. 1
179 Ms McManus asked the Minister for Health and Children if the cost of depreciation of capital investment is taken into account when allocating budgets to hospitals; if so, the way in which it is measured; and if he will make a statement on the matter. [17417/01]
Depreciation is not charged as expenditure to the income and expenditure account, but is calculated on capital assets and taken into account in the balance sheet by way of the capitalisation account. This ensures that the assets are appropriately valued in the accounts.
Depreciation allows businesses to charge, across the lifetime of the asset, the economic cost of its use to the business. However, capital investment is fully met by the Department of Health and Children through the national development plan. If depreciation were charged as an expenditure item throughout the economic life of the asset, the Exchequer would technically be paying twice for the same asset.
