underdepreciation

depreciation [(di-pree-shee-ay-shuhn)]

A decline over time in the value of a tangible asset, such as a house or car.

depreciation

The periodic cost assigned for the reduction in usefulness and value of a long-term tangible asset. Because firms can use several types of depreciation, the amount of depreciation recorded on corporate financial statements may or may not be a good indication of an asset's reduction in value. Depreciation not only affects the asset's value as stated on the balance sheet, it also affects the amount of reported earnings. See also Accelerated Cost Recovery System, accelerated depreciation, accumulated depreciation, recapture of depreciation, straight-line depreciation.

Main Entry: de·pre·ci·a·tion
Pronunciation: di-"prE-shE-'A-sh&n
Function: noun
1 : any decrease in the value of property (as machinery) for the purpose of taxation that cannot be offset by current repairs and is carried on company books as a yearly charge amortizing the original cost over the useful life of the property

---

accelerated depreciation
: the depreciation of property that was put into use prior to 1980 which is allowed at a faster rate than normal under the depreciation rules in force before the adoption of the Accelerated Cost Recovery System

---

straight–line depreciation
: depreciation of an asset by a fixed percentage of its original cost based on its estimated life
2 : a loss in the value of property due to physical deterioration and wear or to obsolescence and lack of adaptability