Non-Cash Charge

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Dictionary Says

Definition of 'Non-Cash Charge'

A charge made by a company against earnings, which does not require an outlay of cash. Non-cash charges will lower earnings in the period when the charge was taken, and if it is large enough, can even turn a net profit into a loss. Many companies are inclined to treat non-cash charges as one-time events - even if they appear somewhat frequently - and report adjusted earnings that exclude the impact of such charges.

A non-cash charge may also be referred to as a write-down.

Investopedia Says

Investopedia explains 'Non-Cash Charge'

Non-cash charges are typically against the depreciation, amortization and depletion accounts on a company's balance sheet. Companies take these charges against earnings due to extraordinary circumstances such as accounting policy changes or significant depreciation in the market value of an asset or inventory.

For example, assume company A acquires company B for $500 million, of which $200 million is attributed to goodwill on its balance sheet. If company A subsequently discovers that B is not as valuable as it estimated at the time of acquisition, it may take a non-cash charge of say $100 million against goodwill. This charge will affect A's earnings in the period when it books the non-cash charge.
Search results for

'Non-Cash Charge'

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    ... This large non-cash charge resulted in a GAAP loss of $5.82 for the full year. Apparel
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    ... NYSE:SM) also has properties with exposure to the Haynesville Shale, Cotton Valley
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    ... expenditures and those that don't. For example, EBITDA is before depreciation and
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  • Natural Gas Write Offs

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    ... Impairments Anadarko Petroleum (NYSE:APC) recorded a $1.5 billion pretax noncash
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    http://www.investopedia.com/ask/answers/05/060105.asp
    ... is indeed a legitimate expense for the company, it does not actually open its coffers
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  • VCA Antech: Generous C-Suite Compensation Provides Opportunity

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    ... The move resulted in a non-cash charge of $14.5 million for the accrual of future
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  • How To Analyze Real Estate Investment Trusts

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    ... depreciation charge. However, our REIT doesn't actually spend this money
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  • Accounting For Differences In Oil And Gas Accounting

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    ... This is because adding back the non-cash charge for DD&A effectively negates the
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  • Fortune Brands Lacking Security

    http://stocks.investopedia.com/stock-analysis/2012/Fortune-Brands-Lacking-Security-FBHS-MAS-CX-USB0207.aspx
    ... Backing out the non-cash charge, the company estimated $149.5 million in operating
    income and 58 cents in earnings per share, which was down 20.5% from last ...

  • 5 Stocks Generating Cash

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    ... Because each year it has been able to reduce its taxable earnings with more than
    $500,000 million worth of depreciation, which is a non-cash charge. ...

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