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Depreciation

Definitions and Meaning in English

1. The reduction in the value of an asset over time, due to factors such as wear and tear, obsolescence, or market conditions.
2. A decrease in the value or price of something, often in a financial or economic context.
3. The act of expressing disapproval or lowering the importance of something or someone.

History and Origin

The word “depreciation” comes from the Latin depretiare, meaning “to lower in value,” derived from de- (down) and pretiare (to value). It has been used in English since the early 18th century, initially in the context of reducing the value of goods or money. The term evolved over time to be widely used in finance and accounting, where it describes the reduction in the value of assets over their useful life.

Detailed Explanation

In financial terms, depreciation refers to the systematic reduction in the value of an asset over time, primarily due to wear and tear or obsolescence. Businesses account for depreciation as an expense to reflect the loss of value of physical assets like machinery, buildings, or vehicles. Depreciation is important in accounting because it helps businesses spread the cost of an asset over its useful life, rather than expensing it all at once. It can also refer to the decline in value of a currency, stock, or other asset in financial markets. Additionally, “depreciation” can also mean the expression of negative opinions about someone or something, often belittling their worth or significance.

Example Sentences

1. The company recorded depreciation on its equipment over a 10-year period.
2. The car’s depreciation made it lose a significant portion of its value after a few years.
3. The building has undergone considerable depreciation due to neglect and age.
4. Depreciation of the currency led to a rise in the cost of imports.
5. The accountant explained how depreciation affects the financial statements.
6. The manager was concerned about the depreciation in the value of their assets.
7. Over time, the computer’s depreciation made it less efficient and outdated.
8. The constant depreciation of the stock price worried investors.
9. The home’s value saw little depreciation even after decades of use.

Synonyms with Short Explanation

1. Amortization – The process of gradually reducing the cost of an intangible asset over time, similar to depreciation for tangible assets.
2. Decline – A decrease in value or quality, often used more generally.
3. Reduction – The action of decreasing or lowering something, particularly in value.
4. Diminution – The act of making something smaller or less, especially in value.
5. Fall – A decrease in value, particularly in financial markets or asset prices.

Related Words with Short Explanation

1. Obsolescence – The state of being outdated or no longer used, often contributing to depreciation.
2. Wear and Tear – The natural deterioration of an asset due to regular use, often a factor in depreciation.
3. Revaluation – The process of re-assessing the value of an asset, often in contrast to depreciation.
4. Devaluation – A reduction in the value of a currency, similar to depreciation in the context of money.
5. Appreciation – The opposite of depreciation, referring to an increase in the value of an asset or currency.

More Matches with Short Explanation

1. Erosion – The gradual reduction or loss of value, often used in the context of financial markets or property.
2. Depreciative – Expressing or showing disapproval or devaluation, often used to describe attitudes or remarks.
3. Discount – A reduction in the price or value of something, often linked to depreciation in value.
4. Attrition – The gradual loss of value or number of assets over time.
5. Obsolete – No longer in use or efficient, often due to depreciation of technology or machinery.

Antonyms

1. Appreciation
2. Increase
3. Growth
4. Advancement
5. Improvement