Depreciation

The charge in a company's accounts which reflects the reduction in value of an asset over time as its useable life is exhausted. Depreciation is charged before calculation of profit, on the grounds that the use of capital assets is one of the costs of being in business and one of the contributors to profit. There are several methods of calculating depreciation. Deprecation can also refer to the decline in the value of a currency in relation to another. When the pound depreciates against the Euro, buyers would have to spend more pounds to obtain a given amount of Euros.