depreciation

The amount by which a fixed asset's accounting or book value is periodically reduced to reflect the fact that the economic value of the asset is steadily reduced by a combination of wear and tear from use, age, and/or obsolescence. The offsetting entry is depreciation expense. American Banker Glossary
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A non-cash expense (also known as non-cash charge) that provides a source of free cash flows.. Amount allocated during the period to amortize the cost of acquiring long-term assets over the useful life of the assets. To be clear, this is an accounting expense not a real expense that demands cash. The sum of depreciation expenses of prior years leads to the balance sheet item Accumulated Depreciation. Bloomberg Financial Dictionary
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Decline in the value of one currency relative to another. Occurs when, because of a change in exchange rates, a unit of one currency buys fewer units of another currency. Chicago Mercantile Exchange Glossary
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Amounts charged to the profit and loss account to reflect the wearing out of a fixed asset over its useful life. For example, if a company buys a car for £10,000 with an expected useful life of four years, it will charge the £10,000 cost to profit and loss account over a four year period. The simplest way to do this is to charge £2,500 expense per year ( straight line depreciation). The purpose of depreciation is to comply with the accruals concept. Since the benefit of the car is received over a four year period, the cost of acquiring the car is charged against profits over a four year period. Dresdner Kleinwort Wasserstein financial glossary
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The reduction in the book or market value of an asset. Exchange Handbook Glossary
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Accounting procedure that spreads the cost of an asset over the life time of the asset. Financial Services Glossary

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US /dɪˌpriːʃiˈeɪʃən/ noun [U]
ACCOUNTING, TAX the amount by which something, such as a piece of equipment, is reduced in value in a company's financial accounts, over the period of time it has been in use. The loss in value reduces a company's profits, and the amount of tax it must pay: »

accelerated depreciation

»

Expenses include depreciation of equipment as well as business insurance.

»

a depreciation charge/deduction

Compare AMORTIZATION(Cf. ↑amortization)
ACCOUNTING the practice of spreading the cost of capital expenditure over several years, especially in order to improve cash flow
MONEY, FINANCE the amount by which a currency loses value in comparison with other currencies: »

The depreciation of the dollar affected the British economy.

»

the depreciation of sterling against the euro

»

Depreciation in the peso since last December could dent sales and cut profit.

Compare APPRECIATION(Cf. ↑appreciation)
FINANCE, INSURANCE a loss of value, especially over time: »

After three years, this car is projected to be worth 57% of its price when new - one of the lowest rates of depreciation of any car in any class.

»

The insurance guarantees that the goods will be replaced at their present market value, without any deduction for depreciation.

Compare APPRECIATION(Cf. ↑appreciation), WEAR AND TEAR(Cf. ↑wear and tear)
See also ACCELERATED DEPRECIATION(Cf. ↑accelerated depreciation), ACCUMULATED DEPRECIATION(Cf. ↑accumulated depreciation), BOOK DEPRECIATION(Cf. ↑book depreciation), TAX DEPRECIATION(Cf. ↑tax depreciation)

Financial and business terms. 2012.

Synonyms:

Look at other dictionaries:

  • dépréciation — [ depresjasjɔ̃ ] n. f. • 1771; de déprécier ♦ Action de déprécier, de se déprécier; état de ce qui est déprécié. Dépréciation des marchandises, de l or, de l argent. ⇒ avilissement, baisse, décote, dévalorisation. L inflation entraîne la… …   Encyclopédie Universelle

  • Depreciation — Dépréciation En économie, une dépréciation est une perte de valeur d un bien, ou plus généralement d une monnaie. En comptabilité générale, une dépréciation est la constatation comptable d une moins value probable sur un élément d actif. Sommaire …   Wikipédia en Français

  • depreciation — de·pre·ci·a·tion /di ˌprē shē ā shən/ n 1: any decrease in the value of property (as machinery) for the purpose of taxation that cannot be offset by current repairs and is carried on company books as a yearly charge amortizing the original cost… …   Law dictionary

  • Depreciation — De*pre ci*a tion (d[ e]*pr[=e] sh[i^]*[=a] sh[u^]n), n. [Cf. F. d[ e]pr[ e]ciation.] 1. The act of lessening, or seeking to lessen, price, value, or reputation. [1913 Webster] 2. The falling of value; reduction of worth. Burke. [1913 Webster] 3.… …   The Collaborative International Dictionary of English

  • DEPRECIATION — Снижение стоимости обесценивание валюты, вызванное действием рыночных механизмов и не связанное с действиями государственных организаций Словарь бизнес терминов. Академик.ру. 2001 …   Словарь бизнес-терминов

  • depreciation — 1767, a lowering of value (originally of currency), noun of action from DEPRECIATE (Cf. depreciate). Meaning loss of value of a durable good by age or wear is from 1900 …   Etymology dictionary

  • depreciation — [n] devaluation accounting allowance, deflation, fall, loss of value, reduction, slump; concepts 137,236,240,247 …   New thesaurus

  • depreciation — [dē prē΄shē ā′shən, diprē΄shē ā′shən] n. [see DEPRECIATE ] ☆ 1. a) a decrease in value of property through wear, deterioration, or obsolescence b) the allowance made for this in bookkeeping, accounting, etc. ☆ 2. a decrease in the purchasing… …   English World dictionary

  • Depreciation — Not to be confused with Deprecation. Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used… …   Wikipedia

  • depreciation — /dapriyshiyeyshsn/ In accounting, spreading out the cost of a capital asset over its estimated useful life. Depreciation expense reduces the taxable income of an entity but does not reduce the cash. A decline in value of property caused by wear… …   Black's law dictionary

  • depreciation — /dapriyshiyeyshsn/ In accounting, spreading out the cost of a capital asset over its estimated useful life. Depreciation expense reduces the taxable income of an entity but does not reduce the cash. A decline in value of property caused by wear… …   Black's law dictionary

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