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English definition of “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 noun from the Cambridge Business English Dictionary © Cambridge University Press)
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