depreciation


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Related to depreciation: depreciation methods, Accumulated Depreciation, straight line depreciation

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 ?
179 expense and regular depreciation deductions for a truck or van purchased in 2014 cannot exceed $3,460.
The Tax Relief Act of 2010 increases the 50% bonus depreciation to 100%.
Pursuant to section 1016(a)(2) (1) of the Internal Revenue Code (Code), (2) the basis of depreciable property is reduced by all depreciation deductions including those that produce no tax benefits for the taxpayer.
Rules relating to additional depreciation for tools and equipment (50 per cent of normal depreciation) if such assets are used on a three shift basis which were there in the previous tax law no longer find place in the new tax law.
In the DDB function, Excel uses 2 x 20%, or 40%, of the initial book value of $110,000 to arrive at the $44,000 of depreciation shown in cell D6 of Figure 1.
Bonus depreciation was enacted in 2003 to help the economy recover from the recession.
This is 10 years less than the depreciation estimated for office, retail and industrial properties, which equals quicker savings for apartment community owners.
Despite the impending expiration of the bonus depreciation opportunity, property owners who have built, purchased or renovated their building in the past 10 years should consider a cost segregation study.
One of the major items causing distortion in the value of domestic and foreign assets is depreciation.
In reality, depreciation is not a number against which one should multiply a factor in order to determine a facility's reinvestment, maintenance and repair budgets, but rather a number to which we should compare the sum of our reinvestment, maintenance and repair budgets.