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English definition of “depreciation”

depreciation

noun [U]
 
 
/dɪˌpriːʃiˈeɪʃən/
ACCOUNTING, TAX the amount by which something, such as a piece of equipment, is reduced in value in a company's financial accounts, over the period of time it has been in use. The loss in value reduces a company's profits, and the amount of tax it must pay: accelerated depreciation Expenses include depreciation of equipment as well as business insurance. a depreciation charge/deduction → Compare amortization
ACCOUNTING the practice of spreading the cost of capital expenditure over several years, especially in order to improve cash flow
MONEY, FINANCE the amount by which a currency loses value in comparison with other currencies: The depreciation of the dollar affected the British economy. the depreciation of sterling against the euro Depreciation in the peso since last December could dent sales and cut profit. → Compare appreciation
FINANCE, INSURANCE a loss of value, especially over time: After three years, this car is projected to be worth 57% of its price when new - one of the lowest rates of depreciation of any car in any class. The insurance guarantees that the goods will be replaced at their present market value, without any deduction for depreciation. → Compare appreciation, wear and tear
→ See also accelerated depreciation, accumulated depreciation, book depreciation, tax depreciation
(Definition of depreciation from the Cambridge Business English Dictionary © Cambridge University Press)
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