Simple English definitions for legal terms
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Depreciate: When something gets older or used up, it becomes less valuable. This is called depreciation. For example, a car that is brand new is worth more than a car that is 10 years old because it has been used and has wear and tear. In accounting, we use depreciation to show how much an asset has lost value over time.
Depreciate
In accounting, to depreciate means to decrease the value of an asset over time due to factors such as age, wear and tear, or technological advancements. This reduction in value is recorded on a company's financial statements as an expense.
These examples illustrate how companies use depreciation to accurately reflect the decreasing value of their assets over time. By recording depreciation as an expense, companies can better understand their true financial position and make informed decisions about future investments.