depreciation

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depreciation,

in accountingaccounting,
classification, analysis, and interpretation of the financial, or bookkeeping, records of an enterprise. The professional who supplies such services is known as an accountant. Auditing is an important branch of accounting.
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, reduction in the value of fixed or capital assets, as by use, damage, weathering, or obsolescence. It can be estimated according to a number of methods. In the straight-line method, depreciation is simply seen as a function of time; the cost of the asset, minus its value as scrap, is divided by an estimate of its life. Other methods distribute depreciation over the life of the asset by gradually increasing, or gradually diminishing, installments. The resale value of a machine generally declines most quickly during its early years; thus its depreciation is measured in decreasing installments. The opposite is true of rights of limited duration, such as copyrights and leaseholds, whose value depreciates most quickly as their date of expiration approaches. The technical name for the depreciation of such nonmaterial rights is amortization. The problem of calculating depreciation has special importance because of the need for accuracy in income tax returns. Failure to make allowance for depreciation results in overestimating income. Depreciation of money is brought about by a decline in the price of a particular currency in terms of other currencies, thereby lowering the foreign exchange value of the first currency.

Bibliography

See J. D. Coughlan, Depreciation (1969); R. P. Brief, ed., Depreciation and Capital Maintenance (1984).

Depreciation

The reduction in the value or worth of an asset, such as a building, through physical deterioration over time, and general obsolescence.

depreciation

[di‚prē·shē′ā·shən]
(industrial engineering)
Loss of value due to physical deterioration.

depreciation

Economics a decrease in the exchange value of currency against gold or other currencies brought about by excess supply of that currency under conditions of fluctuating exchange rates
References in periodicals archive ?
Stewart was famously described as a "depreciating asset" and Rubery pocketed the club record pounds 2.75m fee only for Stewart's goals to fire Ipswich into the Premiership.
As such, it is, in effect, a depreciating asset. This is fine when the price is going up and investors can see a profit, but its value is only as strong as investor demand for it.
Skoda finance brand manager Jacqui Rowley says: "Many banks are unwilling to lend customers money to finance a depreciating asset such as a car and although the base rate has gone down average rates for personal loans have actually been increasing." The company's Solutions scheme offers the option to part exchange an existing Skoda for a new one and to make an optional final payment to own the car or return it without making the final payment.
The proximity of the European deadline left him no time to find a new club and he is now a rapidly depreciating asset. Furthermore he was away with Holland when he found out that we had signed two new goalies.
Murray has finally conceded that van Bronckhorst won't sign a new contract and that effectively forces the club to sell what has become a depreciating asset.
With positive net migration to the UAE, new residents to the country are able to pay slightly cheaper rents as an empty property is classified as a depreciating asset. At the end of the day, landlords are businessmen, their property is an investment, and for that property to serve its purpose as an investment it must be rented out.
Secondly, with the Euro losing value, customers for American goods will be buying them with a rapidly depreciating asset. When American companies convert that revenue into dollars, it is now worth significantly less.
The Scotland star also won the treble but he played in less than half of the club's league games and, at 33, he is a depreciating asset.
"However, timeshare properties can be, for many, a depreciating asset as historically more timeshares have appeared in the same vicinity and therefore there has been more supply with less demand, which typically pushes the prices down."
After all, he says, a car or a holiday is a depreciating asset, whereas education gives you a start that lasts for life.
A car is a depreciating asset, so they put their money into appreciating assets that go up daily," explains Rashad.