DEPRECIATION

depreciation (di-pree-shee-ay-sh<<schwa>>n), n. A decline in an asset’s value because of use,

wear,   or   obsolescence.   Cf.   APPRECIATION;   AMORTIZATION(2).   —   depreciate,vb.   —

depreciable,adj.

accumulated  depreciation.The  total  depreciation  currently  recorded  on  an  asset.  •  On  the

balance sheet, an asset’s total cost less accumulated depreciation reflects the asset’s book value. —

Also termed accrued depreciation.

annual depreciation.The annual loss to property due to regular wear and tear.

functional  depreciation.Depreciation  that  results  from  the  replacement  of  equipment  that  is

not yet worn out, but that is obsolete in light of a new invention or improved machinery allowing

more efficient and satisfactory production. [Blacks Law 8th]