Meaning & use
depreciation
Last updated
Meanings
noununcountablefinance
The gradual fall in what an asset such as a car, machine or building is worth as it ages and gets used.
Grammar: Usually uncountable: depreciation is expected on every vehicle.
Patterns
- depreciation of something
- depreciation on something
- depreciation in value
A new car suffers its steepest depreciation in the first year.
The accountant spread the depreciation of the machinery over ten years.
Depreciation on office computers is faster than on office furniture.
nouncountable or uncountablefinance
A drop in the value of a currency compared with other currencies.
Grammar: Often uncountable, but a sharp depreciation can be counted: a 5 percent depreciation.
Patterns
- depreciation of the currency
- depreciation against something
The depreciation of the peso made imported fuel more expensive.
Exporters welcomed the depreciation against the dollar.
A sudden depreciation of the currency worried investors.
Word forms
| plural | depreciations |
|---|
Common combinations
- annual depreciation
- The annual depreciation on the delivery van is about two thousand dollars.
- rapid depreciation
- Rapid depreciation makes some luxury cars poor investments.
- accumulated depreciation
- Accumulated depreciation is subtracted from the original cost on the balance sheet.
- calculate depreciation
- She used a spreadsheet to calculate depreciation for each piece of equipment.
- currency depreciation
- Currency depreciation raised the price of imported goods.
Synonyms and how they differ
- devaluation
- Devaluation is usually a deliberate government decision to lower a currency's official value, whereas depreciation is a general drop that can happen on its own.
- decline
- Decline is a plain everyday word for any fall, while depreciation is the technical term for a loss in the worth of an asset.
- markdown
- Markdown is a price cut by a seller, not the gradual accounting loss of value that depreciation names.
Opposites
Word family
- depreciate verb
- to lose value over time
- depreciated adjective
- reduced in value
- depreciable adjective
- able to be depreciated for tax or accounting purposes
- appreciation noun
- an increase in value, the opposite of depreciation
Commonly confused: depreciation or amortization?
depreciation vs amortization
Amortization spreads the cost of an intangible asset or a loan over time, while depreciation applies to physical assets.
Practice
A company writes off the cost of a delivery truck a little each year. This accounting practice is called ______.
Choose one answer.
Depreciation is the gradual loss of an asset's value. Appreciation is the opposite, an increase in value.
Make it your own
Write a sentence using “depreciation”, then check it and compare it with the examples above.