Depreciation
/dɪˌpriːʃiˈeɪʃən/
Definitions
- (n.) The gradual reduction in the value of a tangible fixed asset over its useful life.
The company recorded depreciation expenses to reflect the wear and tear of its machinery.
- (n.) An accounting method of allocating the cost of a tangible asset over its useful life.
Depreciation is used to spread out the expense of an asset rather than charging it all at once.
Related terms
Commentary
Depreciation typically applies to physical assets and differs from amortization, which relates to intangible assets.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.