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 ?
Sri Lankan rupee depreciated nearly 10 percent against the USD during 2015.
I believe that the critical point is to know whether the value of the depreciated lira will be long lasting or not.
Accordingly, if the property is eventually sold for more than its depreciated basis and resulting in a gain, then it had not truly been losing value while the depreciation expense was being taken.
The depreciated value of the Kitchen Equipment so transferred would be adjusted by OC in its Books of Accounts towards repayment of Government Loan outstanding against OC.
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The euro depreciated against the rupee, as it started the day's trading at Rs 112.
The dollar depreciated sharply against both of these high-interest rate currencies through the second and third quarters of 2009, but the dollar has shown little movement vis-a-vis either of these currencies since the end of September.
If the depreciation period and/or method previously used for the relinquished and replacement property are the same, the replacement property is depreciated using the same period and/or method.
The weakest growth was seen in the Northeast, where the Zindex actually depreciated -1.
Prior to 1981, taxpayers could depreciate each component of a building separately; for example, the shell might be depreciated over 40 years and the roof over 20.
But in a dissenting opinion, three justices argued that labor costs should not be depreciated.