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 ?
Operative net sales for the year, excluding the write-down of the project Mall of Scandinavia, was SEK 45,052m.
In addition to lower levels of balance sheet gearing, they have longer (older) land banks, and so are less vulnerable to write-downs.
Last year Merrill lost about $8bn on second-half write-downs and adjustments of about $24bn.
The new leadership structure and the write-downs were decided Sunday at an emergency meeting of Citigroup's board.
Two recent standard-setting events in China allow us to unambiguously identify a test sample of firms that voluntarily wrote down assets and a control sample of firms that suffered an asset impairment but chose not to write-down the impaired assets.
Trust Shares will be released from the suspense account more rapidly after the write-down and plan amendment because all but one of the Trust Loans being eliminated he write-down had later maturity dates than Trust Loan 1.
37 million during the fourth quarter from $894,000 were it not for the write-down.
This write-down is made to the extent that the company has taxable temporary differences against which it will be able to use its unused tax losses.
Nordic community builder Peab AB (STO:PEABB) on Monday reported a write-down of SEK800m in connection with its Mall of Scandinavai project in Solna.
9 billion in write-downs on collateralized debt obligations and subprime mortgages.