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Depreciation |
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Depreciation1. A fall in the value of a country's currency on the exchange market, relative either to a particular other currency or to a weighted average of other currencies. The currency is said to depreciate. Opposite of "appreciation." 2. The decline in value or usefulness of a piece of capital over time, and/or with use.Depreciation(1) Decrease in value to real property improve-ments caused by deterioration or obsolescence. (2) A loss in value as an accounting procedure to use as a deduction for income tax purposes.DepreciationThe charge in a company's accounts which reflects the reduction in value of an asset over time as its useable life is exhausted.Depreciation is charged before calculation of profit, on the grounds that the use of capital assets is one of the costs of being in business and one of the contributors to profit.There are two main methods of depreciation:Straight line: the residual (scrap) value of the asset is deducted from its original cost, and the resultant figure is divided by the estimated life of the asset. The result of that is deducted annually over the life of the asset. So an asset that costs £10,000 and that has a residual value of £200 with a useable life of 4 years is depreciated by £2450 per year.Reducing balance: the amount of annual depreciation is a constant proportion of the cost of the asset.Depreciation has no effect on cash flow. It is just an accounting procedure.Similar MatchesDepreciation tax shieldDepreciation tax shieldThe value of the tax write-off on depreciation of plant and equipment. Declining Balance Method Of DepreciationDeclining Balance Method Of DepreciationDepreciation by a fixed annual percentage of the balance after deducting each yearly depreciation amount. Accrued DepreciationAccrued Depreciation(1) The amount reserved each year in the accounting system for replacement of a building or other asset. (2) The useful life of a property at any given time. Currency depreciationCurrency depreciationSee depreciation. Book DepreciationBook DepreciationDepreciation reserved (on the books) by an owner for future replacement or retirement of an asset. Further SuggestionsSum of the years digits depreciationReal appreciation or depreciation Capital depreciation Earnings before interest, taxes, and depreciation (EBITD) Double declining balance depreciation Double Declining Balance Method Of Depreciation Straight line depreciation Earnings before interest, taxes, depreciation, and amortization (EBITDA) Double declining balance depreciation method (DDB) Recapture Of Depreciation Capital appreciation or depreciation Asset Depreciation Range System Currency depreciation |
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