Depreciation
46 definitions

Depreciation
A decline in the value of a currency, financial asset, or capital good. When applied to a capital good, depreciation usually refers to loss of value because of obsolescence, wear, or destruction (as by fire or flood) and is also called consumption of fixed capital. Tax depreciation is the depreciation that the tax code allows businesses to deduct when they calculate their taxable profits. It typically occurs more rapidly than economic depreciation, which is the actual decline in the value of an asset. Both measures of depreciation appear as part of the national income and product accounts.
Depreciation

The systematic allocation of the depreciable amount of an asset over its useful life.

Depreciation

The systematic and rational allocation of the acquisition cost of an asset, less its estimated salvage or residual value, over its estimated useful life. Depreciation reflects the use of the asset(s) during specific operating periods in order to match costs with related revenues in measuring income or determining the costs of carrying out program activities. 

Depreciation

Decline in the value of a property or other asset.

Depreciation

A decrease in the value or price of a property due to changes in market conditions, wear and tear on the property, or other factors.

Depreciation

An accounting expense that allocates the cost of an asset over its estimated useful life. The undepreciated value of the asset is referred to as the book value. Methods of calculating depreciation include straight line, declining balance and sinking fund.

Depreciation

Normally, charges against earnings to write off the cost, less salvage value, of an asset over its estimated useful life. It is a bookkeeping entry and does not represent any cash outlay nor are funds earmarked for the purpose.

Depreciation

An accounting practice that is used to assign a cash value to something whose value decreases with age or wear and tear. Depreciation can mean either the process of determining that value, or the amount of value lost over a given period of time.

Depreciation

“Depreciation” means, for each fiscal year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the gross asset value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, depreciation shall, except to the extent otherwise required by regulation 1.704-3(d)(2), be an amount which bears the same ratio to such beginning gross asset value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the federal income taxdepreciation, amortization or other cost recovery deduction for such year is zero, depreciation shall be calculated with reference to such beginning gross asset value using any reasonable method selected by the tax matters member.

Depreciation

Depreciation means a charge to current operations that distributes the cost of a tangible capital asset, less estimated residual value, over the estimated useful life of the asset in a systematic and logical manner. It does not involve a process of valuation. Useful life refers to the prospective period of economic usefulness in a particular contractor's operations as distinguished from physical life; it is evidenced by the actual or estimated retirement and replacement practice of the contractor.

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About this term

Depreciation has been defined 46 different ways in documents like Congressional Budget Office Glossary of Terms, 2010 Handbook of International Public Sector Accounting Pronouncements, A Glossary of Terms Used in the Federal Budget Process, and 7 more.

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