Meaning & Definition of word "Depreciation"
Depreciation
/dɪˌpriː.ʃiˈeɪ.ʃən/
noun:
- 1. A reduction in the value of an asset over time, typically due to wear and tear.
- Example: The depreciation of the equipment was calculated to be 20% per year.
- 2. A decrease in the purchasing power of money, often due to inflation.
- Example: The constant inflation led to significant depreciation of the currency.
- 3. The accounting method of allocating the cost of a tangible asset over its useful life.
- Example: The company uses straight-line depreciation to report its assets.
Etymology
●From Latin 'depretiatio', meaning 'a lowering in value'.
Common Phrases and Expressions
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.
Related Words
devalue:
To reduce or underestimate the worth or importance of something.
amortization:
The process of paying off a debt over time through regular payments.
Slang Meanings of depreciation
Meaning: Value drop
● Example Sentence: That old phone has a total value drop after a year.
Meaning: Asset shrinkage
● Example Sentence: The asset shrinkage on those machines was worse than expected.