What is Depreciation?

Depreciation Definition: Depreciation is the decrease in an asset’s value over time.

This change in value is recorded in accounting records, where depreciation refers to how the lifetime of a physical asset is allocated over a specific time to show how its value becomes less.

When an asset is fully depreciated and no longer has value, it may be written off as an expense. Vehicles and appliances are examples of assets that depreciate in value, and this is taken into consideration when calculating this change over time.

Appreciation is the opposite of depreciation and refers to the increase of an asset over time.

Jul 30 - Comparewise Business Loan Banner

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