Depreciation

/dɪˌpriː.ʃiˈeɪ.ʃən/

Meaning & Definition

noun

A reduction in the value of an asset over time, typically due to wear and tear.

The depreciation of the equipment was calculated to be 20% per year.

A decrease in the purchasing power of money, often due to inflation.

The constant inflation led to significant depreciation of the currency.

The accounting method of allocating the cost of a tangible asset over its useful life.

The company uses straight-line depreciation to report its assets.

From Latin 'depretiatio', meaning 'a lowering in value'.

depreciation schedule

A table or documentation that outlines the depreciation expense of an asset over time.

accumulated depreciation

The total depreciation expense that has been deducted from an asset's value since it was acquired.

book value

The value of an asset as recorded on the balance sheet, after depreciation.

devalue

To reduce or underestimate the worth or importance of something.

amortization

The process of paying off a debt over time through regular payments.

Value drop

That old phone has a total value drop after a year.

Asset shrinkage

The asset shrinkage on those machines was worse than expected.