Depreciation

Sam · Posted: Sat May 29, 2004 3:18 am Post subject: Depreciation

Depreciation is a downfall in the value of a property due to age, natural wear and tear, etc. It is the opposite of appreciation, and is also an accounting term, which shows the falling money value of an asset and is used as an expense to lessen the taxable income.

For example, William purchased a house in Finland, in $6,000,000 ten years before. After five years, the purchasing value of the house has been reduced by $1,000,000 due to normal wear and tear. Now the total depreciated value of the house is $5,000,000. This is known as depreciation.

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