- Depreciation is defined as a reduction in the value of an asset that occurs over time as the asset gets older or as wear and tear occurs, or the decline of one currency in relation to others.
- When your computer gets older and less valuable and useful because of its age and wear and tear, this is an example of depreciation.
- When the dollar declines in value in relation to the Euro, this is an example of depreciation.
depreciation definition by Webster's New World
- a decrease in value of property through wear, deterioration, or obsolescence
- the allowance made for this in bookkeeping, accounting, etc.
- ☆ a decrease in the purchasing power of money
- a making seem less important; disparagement
Origin: see depreciate
depreciation definition by American Heritage Dictionary
- A decrease or loss in value, as because of age, wear, or market conditions.
- Accounting An allowance made for a loss in value of property.
- Reduction in the purchasing value of money.
- An instance of disparaging or belittlement.
depreciation - Business Definition
- The periodic cost assigned for the reduction in usefulness and value of a long-term tangible asset. Because firms can use several types of depreciation, the amount of depreciation recorded on corporate financial statements may or may not be a good indication of an asset's reduction in value. Depreciation not only affects the asset's value as stated on the balance sheet, it also affects the amount of reported earnings. Also called expense. See also Accelerated Cost Recovery System, accelerated depreciation, accumulated depreciation, recapture of depreciation 1, straight-line depreciation.
- A decline in the value of a currency in relation to other currencies. For example, the dollar may suffer depreciation against the euro, meaning that more dollars are required to purchase a given amount of euros.
depreciation - Cultural Definition
A decline over time in the value of a tangible asset, such as a house or car.
depreciation - Investment & Finance Definition
The loss, over time, in the value of an asset such as plant, equipment, and vehicles. Depreciation accounts for the decline in the value of the asset as it ages. Several methods are used for calculating depreciation, including straight-line depreciation, accelerated depreciation, and the accelerated cost recovery system. See also straight-line depreciation method.
depreciation - Legal Definition