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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 MatchesAccrued 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. Capital appreciation or depreciationCapital appreciation or depreciationThe increase or decrease in the value of the individual's investment in the property. Capital depreciationCapital depreciationSee depreciation. Sum of the years digits depreciationSum of the years digits depreciationMethod of accelerated depreciation. Double Declining Balance Method Of DepreciationDouble Declining Balance Method Of DepreciationA use of the declining balance method, but with double the depreciation allowable by straight line. An accelerated method. Further SuggestionsDepreciation tax shieldCurrency depreciation Earnings before interest, taxes, and depreciation (EBITD) Book Depreciation Recapture Of Depreciation Currency depreciation Double declining balance depreciation method (DDB) Earnings before interest, taxes, depreciation, and amortization (EBITDA) Real appreciation or depreciation Straight line depreciation Asset Depreciation Range System Declining Balance Method Of Depreciation Double declining balance depreciation |
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