depreciation

USAGE SUMMARY

"depreciation" is a correct and commonly used word in written English.
It means the decrease in value of an asset over time due to wear, tear, or obsolescence. For example, "The machine has experienced a lot of depreciation due to its age and lack of maintenance."

✓ Grammatically correct

Formal & Business

News & Media

Science

Human-verified examples from authoritative sources

Exact Expressions

60 human-written examples

On an underlying basis, as measured by earnings before interest, tax, depreciation and amortisation, the Guardian and Observer lost £22m, but the cash loss, a more accurate measure of financial performance, was larger at £33m.

The Guardian

Just Eat, reports the FT, is hoping to list at a value of £700m-£900m, or 70 to 90 times its profits before interest, tax and depreciation, on the basis that it is a "technology" company.

The Guardian - Business

Traders were surprised that the RBA's statement did not change from last month as it reiterated its view that "further depreciation seems both likely and necessary".

The Guardian

Therefore, taking into account other staff costs and depreciation, it is fair to say that the operating loss for TNL was about £33.9m.

The Guardian

The inflation caused by the depreciation of the krona has been tame and growth prospects are rosy.

The Guardian - Business

Ebitda (earnings before interest, tax depreciation and amortisation) fell to £306m from £333m, but remained higher than the 2009 total of £298m.

The Guardian - Business

EBITDA – or earnings before interest, tax, depreciation and amortisation – are forecast to be £11.5bn-£12bn in 2015.

The Guardian - Business

Amec would pay about 9.5 times Foster Wheeler's expected top-line earnings (before interest, tax and depreciation) for 2014.

The Guardian

And prospective buyers will note that the business did register increased earnings before interest, tax, depreciation and amortisation of £9m, despite a fall of almost 10% in revenues.

The Guardian

This positive backdrop, together with the significant stimulus from record low interest rates and the recent depreciation of the Australian dollar, underpin Treasury forecasts for an acceleration of domestic economic growth over the forward estimates to the point where the economy is back at a trend rate of expansion by 2016-17.

The Guardian

The same month Mr Putin bailed out Rosneft, a big oil company suffering from the depreciation of the rouble.

The Economist

Expert writing Tips

Best practice

When discussing financial statements, clearly specify the depreciation method used (e.g., straight-line, declining balance) for transparency.

Common error

Don't use "depreciation" interchangeably with "impairment". "Depreciation" is a systematic allocation of an asset's cost over its useful life, while "impairment" refers to a sudden, unexpected decline in an asset's value.

Linguistic Context

The primary grammatical function of "depreciation" is as a noun. It commonly refers to the reduction in the value of an asset over time. Ludwig AI confirms this, indicating that "depreciation" is correctly and commonly used in written English.

Expression frequency: Very common

Frequent in

Formal & Business

30%

News & Media

35%

Science

25%

Less common in

Encyclopedias

3%

Wiki

4%

Reference

3%

Ludwig's WRAP-UP

The term "depreciation" is a commonly used noun that refers to the decrease in the value of an asset over time. It is grammatically correct and frequently appears in formal business, news media, and scientific contexts. According to Ludwig, it accurately describes the reduction in asset value. To avoid confusion, it's crucial to differentiate "depreciation" from "impairment". When writing about "depreciation", specify the calculation method for transparency. Considering its widespread use and consistent meaning, "depreciation" is a fundamental concept in finance and accounting.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

decline in value

This alternative directly describes the core meaning of depreciation: a reduction in worth.

asset devaluation

This term focuses on the economic concept of assets losing monetary value.

loss of worth

A more general way to express the reduction in value, applicable in various contexts.

diminution in asset value

A more formal way to state the reduction in the value of assets.

erosion of capital

This phrase emphasizes the loss of economic resources over time.

reduction in book value

Specific to accounting, this term refers to decreasing the value of an asset on a company's balance sheet.

wearing out

This implies a physical process of degradation that leads to a loss of value.

decrease in utility

This refers to a reduction in the usefulness or functionality of an asset.

currency weakening

This applies when referring to the decrease in the value of a currency.

amortization

Similar to depreciation, but usually refers to intangible assets.

FAQs

How is "depreciation" used in accounting?

"Depreciation" is used to allocate the cost of a tangible asset over its useful life. This reflects the asset's gradual decline in value due to wear and tear or obsolescence.

What are common methods for calculating depreciation?

Common methods include straight-line, declining balance, and units of production. Each method allocates the cost differently, affecting reported profits.

How does "depreciation" affect a company's financial statements?

"Depreciation" reduces a company's profit and the book value of its assets, impacting key financial ratios and metrics.

What's the difference between "depreciation" and "amortization"?

"Depreciation" applies to tangible assets, while "amortization" applies to intangible assets. Both represent the allocation of an asset's cost over its useful life.