What is depreciation?

Question

What is depreciation?

Answer 1

The decline in the value of a capital asset. Depreciation represents a cost of ownership and the consumption of an asset’s useful life.

depreciation (in terms of Finance) :-

The loss, over time, in the value of an asset such as plant, equipment, and vehicles. Depreciation accounts for the decline in the value of the asset as it ages. Several methods are used for calculating depreciation, including straight-line depreciation, accelerated depreciation, and the accelerated cost recovery system.

depreciation (in  terms of Law):-

A decline in the value of an asset over time, due to its increasing obsolescence or the wear and tear due to its use; a deduction on an income tax return of part of the asset’s cost, transforming its declining value into a benefit for the taxpayer.

Answer 2

1) Depreciation is an allowance or provision made in the financial records of a business or association for "wear and tear" and "technical obsolescence "on plant and equipment. The idea of depreciation is to spread the cost of that capital asset over the period of its "useful life to the entity" that currently owns it. If the full cost of the asset were to be borne in the year that it was purchased, then that year's expenditure would be unfairly penalised whilst expenditure during the remaining years, which were still receiving the benefit from the asset, would not be affected.

2) Depreciation is the exhaustion of the useful service potential of an asset through the combined effects of utilization, wear and tear, aging and obsolence.

3) Depreciable asstes are physical objects that retain their size and shape but that eventually wear out or become obsolete. In accounting, the depreciation means the systematic allocation of the cost of a depreciable asset to sexpense over the asset's useful life.

4) The decline in the value of a capital asset. Depreciation represents a cost of ownership and the consumption of an asset’s useful life.

- AJM

Answer 3

FALL in value with passage of time

Answer 4

I agree with Ajmal Mohamed's answer, It is a exhaustive description of what is depreciation.

Answer 5

like a car the second you leave the lot that 10k dollar car is  now worth 7k