depreciation
Definition 1
A noncash expense that reduces the value of an asset as a result of wear and tear, age, or obsolescence. Most assets lose their value over time (in other words, they depreciate), and must be replaced once the end of their useful life is reached. There are several accounting methods that are used in order to write off an asset's depreciation cost over the period of its useful life. Because it is a non-cash expense, depreciation lowers the company's reported earnings while increasing free cash flow.
Definition 2
A decline in the value of a given currency in comparison with other currencies. For instance, if the U.S. dollar depreciates against the Euro, buyers would have to pay more dollars in order to obtain the original amount of euros before depreciation occurred.
Cite this definition
Related Terms
accelerated depreciation, declining balance method, Accelerated Cost Recovery System, Modified ACRS, double-declining balance depreciation method, Net Domestic Product, pre-depreciation profit, straight line depreciation, Sum-of-the-Years'-Digits Method
'depreciation
' appears in the definitions of these terms on BusinessDictionary.comdeclining balance depreciation, sum of the years digits (SYD) depreciation, units-of-output depreciation, double declining-balance depreciation, salvage value, and
Related Research Articles from the InvestorGuide.com University
Federal Reserve and Monetary Policy Learn the basics about the Federal Reserve, The Federal Open Market Committee (FOMC), and how monetary policy is used to target interest rates to avoid inflation and slow economic growth.

International Stocks What information should you consider before investing in international stocks? Learn about the different kinds of international stocks, how to buy them, and how to weigh the pros and cons of risk and diversification.

Economic Indicators Find out about some of the most researched pieces of news in the world. Topics include Gross Domestic Product, Consumer Price Index, the Producer Price Index, Employment Indicators, the Retail Sales Index, the National Association of Purchasing Management Index, the Consumer Confidence Index, and more.

Featured Sponsor
|
|