noun

depreciation

dih-pree-shee-AY-shuhn

Depreciation (noun) means In accounting, the spreading of the cost of an asset over the years it is used, recorded as an expense to reflect the value it loses through wear and age. Example: “The vans are written off over five years using straight-line depreciation.”

noun

In accounting, the spreading of the cost of an asset over the years it is used, recorded as an expense to reflect the value it loses through wear and age.

"The vans are written off over five years using straight-line depreciation."

"Profits fell once depreciation was charged against the new plant."

A fall in the value or price of something over time.

"A new car suffers heavy depreciation in its first year."

"Depreciation of the currency made imports dearer."

How to use depreciation

Learner’s notes

In plain EnglishThe value something loses as it gets older, or the way accountants record that loss.

When to use it

Neutral; central vocabulary in accounting, tax and economics.

Memory tip

Do not confuse depreciation with deprecation, which means expressing disapproval, or in computing marking a feature as outdated.

Trace the full origin ↓

Easily confused with

appreciation → amortisation → devaluation → deprecation

Common pairings

straight-line depreciation accumulated depreciation currency depreciation rate of depreciation

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The vans are written off over five years using straight-line _____.

Etymology

From Late Latin depretiare 'to lower the price of', from de- 'down' and pretium 'price'.

Origin: Latin

Synonyms

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write-down amortisation capital allowance decline devaluation loss of value drop

Antonyms

appreciation gain

Related words

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Rhymes for depreciation

region billion ablation allusion emulsion ideation novation abortion abrasion diffusion elocution extension

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Frequently asked questions

What is the difference between depreciation and amortisation?

They are the same idea applied to different assets. Depreciation spreads the cost of tangible assets such as vehicles, machinery and buildings. Amortisation does the same for intangible assets such as patents, licences and goodwill.

What is the difference between depreciation and devaluation?

Depreciation of a currency is a fall in its market value under floating exchange rates. Devaluation is a deliberate reduction announced by a government or central bank under a fixed or pegged rate. One happens to a currency; the other is done to it.

Why is depreciation an expense if no money leaves the business?

Because the money was spent when the asset was bought, and the asset is used up gradually. Charging depreciation each year matches that cost to the periods that benefit from it, which gives a truer picture of profit than recording the whole outlay at once.

What is the meaning of depreciation?

"depreciation" (noun) means in accounting, the spreading of the cost of an asset over the years it is used, recorded as an expense to reflect the value it loses through wear and age.

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