Depreciation: Difference between revisions
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An accounting charge reflecting the estimated periodic cost to a business of a physical capital asset over its estimated useful economic life. Accounting depreciation seeks to ensure that the total accounting cost of a capitalised asset is appropriately spread and matched to the economic benefits of using the asset. Methods of spreading the total accounting cost include Straight line, Reducing balance and Sum of the digits. | |||
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More generally, any decrease in the value of an asset resulting from the passing of time. | |||
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A decrease in the value of a currency. | |||
Revision as of 14:27, 13 May 2016
1.
An accounting charge reflecting the estimated periodic cost to a business of a physical capital asset over its estimated useful economic life. Accounting depreciation seeks to ensure that the total accounting cost of a capitalised asset is appropriately spread and matched to the economic benefits of using the asset. Methods of spreading the total accounting cost include Straight line, Reducing balance and Sum of the digits.
2.
More generally, any decrease in the value of an asset resulting from the passing of time.
3.
A decrease in the value of a currency.
