Indexed cost of acquisition applies to long-term capital gains, with specified asset classes and transfers excluded from indexation. Computation of long-term capital gains requires using indexed cost of acquisition and indexed cost of any improvement to adjust historic costs for inflation; however, indexation is excluded for specified asset classes and transfer types including certain bonds and debentures, shares acquired using convertible foreign exchange, transfers by non-residents in defined cases, most depreciable assets (with a narrow exception for straight-line depreciation in power-generating units), slump sale transfers, units and GDRs purchased in foreign currency, and transfers by foreign institutional investors.