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 ?
Summary: How can you ensure that you do not depreciate over time?
Earlier, the SBP had let the rupee depreciate by a staggering 34 per cent to Rs141.4 since December 2017.
"Factoring this in, real estate developers lure NRIs to buy apartments in India with attractive schemes, when the rupee depreciates. "To opt for a foreign visit at this point of time will be more expensive for Indians.
The Central Bank of Nigeria (CBN) on Friday, May 18, 2018, lifted the Retail Secondary Market Intervention Sales (SMIS) of the Inter-bank Foreign Exchange Market with the sum of $293million as Naira depreciates against dollar at parallel market.
However, when silence prevails in the exporters' camp, you can conclude, without checking the statistics, that the lira depreciates. So, we should expect at least that during depreciation periods, Turkish export prices decrease in terms of the dollar or euro in order to give a push to the competitiveness of exports.
While residential property depreciates over 27.5 years and land cannot be depreciated, other components of the rental property--if properly identified--can be expensed more rapidly.