depreciate

verb de·pre·ci·ate \ di-ˈprē-shē-ˌāt \
Updated on: 3 Dec 2017

Definition of depreciate

depreciated; depreciating
transitive verb
1 : to lower in honor or esteem
  • often depreciates the importance of her work
2 a : to lower the price or estimated value of
  • depreciate property
b : to deduct from taxable income a portion of the original cost of (a business asset) over several years as the value of the asset decreases
intransitive verb
: to fall in value
  • advised us to sell the stock before it depreciates

depreciable

play \-shə-bəl\ adjective

depreciatingly

play \-shē-ˌā-tiŋ-lē\ adverb

depreciation

play \-ˌprē-shē-ˈā-shən\ noun

depreciative

play \-ˈprē-shə-tiv, -shē-ˌā-tiv\ adjective

depreciator

play \-shē-ˌā-tər\ noun

depreciatory

play \-shə-ˌtȯr-ē\ adjective

Examples of depreciate in a Sentence

  1. These changes have greatly depreciated the value of the house.

  2. The value of the house has depreciated greatly.

Recent Examples of depreciate from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'depreciate.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Origin and Etymology of depreciate

Middle English, from Late Latin depretiatus, past participle of depretiare, from Latin de- + pretium price — more at price

Synonym Discussion of depreciate

decry, depreciate, disparage, belittle mean to express a low opinion of. decry implies open condemnation with intent to discredit.
    • decried their defeatist attitude
depreciate implies a representing as being of less value than commonly believed.
    • critics depreciate his plays for being unabashedly sentimental
disparage implies depreciation by indirect means such as slighting or invidious comparison.
    • disparaged polo as a game for the rich
belittle usually suggests a contemptuous or envious attitude.
    • belittled the achievements of others

Financial Definition of DEPRECIATE

depreciation

What It Is

Depreciation is a term used for tax and accounting purposes that describes the method a company uses to account for the declining value of its assets.

How It Works

An asset acquired in 2005 is unlikely to be worth the same amount five years later; most of the time, the asset will have worn down, been depleted, or become obsolete.

While there are many ways to calculate depreciation, the most basic is the "straight line" method. Under this method, the depreciation of a given asset is evenly divided over its useful lifetime. The method entails dividing the cost of the asset (minus its salvage value) by its estimated useful life.

For example, let's say Company XYZ bought a machine that helps them produce widgets. The machine cost $30,000 and is expected to last 10 years. It's "salvage value" (the amount the machine is worth after 10 years of use) is $3,000. In this particular case, Company XYZ would take a non-cash charge of $2,700 per year to account for the asset's annual depreciation [($30,000 - 3,000) / 10 = $2,700].

Why It Matters

Neither depreciation (or its related concept, amortization) will directly affect the cash flow of a company as it is a non-cash expense. The company is not spending money as a result of an assets depreciation, it just wouldn't be worth as much should the company be liquidated.

As most assets age, they decline in value. Depreciation is a term used for tax and accounting purposes that describes the method that a company uses to account for the declining value of its fixed assets (or tangible assets that have an estimated useful life of one year or longer). Several different methods are commonly used to account for depreciation. These include:

Straight Line: Using this method, the depreciation of a given asset is evenly divided over its useful lifetime. The method entails dividing the cost of the asset (minus its salvage value) by its estimated useful life. For example, let's say a fixed asset costs $30,000, is expected to last 10 years, and its "salvage value" is $3,000. In this particular case, a company would take a non-cash charge of $2,700 per year to account for the asset's annual depreciation. ($30,000 -3,000) / 10 = $2,700
Accelerated Depreciation: Using this method, the greatest depreciation deductions occur in the first years after an asset is purchased.
Capitalized: Using this method, a particular asset is never depreciated.
Expensed: Using this method of depreciation, the asset is fully depreciated in the first year.
150% Declining Balance: This method of depreciation uses 150% of the straight-line value for the first year. The same percentage is then applied to the residual balance each subsequent year.
Double Declining Balance: This method uses twice the straight-line percentage for the first year. The same percentage is then applied to the balance each subsequent year.


DEPRECIATE Defined for English Language Learners

depreciate

verb

Definition of depreciate for English Language Learners

  • : to cause (something) to have a lower price or value

  • : to decrease in value

  • : to describe (something) as having little value


DEPRECIATE Defined for Kids

depreciate

verb de·pre·ci·ate \ di-ˈprē-shē-ˌāt \

Definition of depreciate for Students

depreciated; depreciating
1 : belittle
  • He often depreciates his own talent.
2 : to lower the price or value of
3 : to lose value
  • New cars depreciate rapidly.

Law Dictionary

depreciate

verb de·pre·ci·ate \ di-ˈprē-shē-ˌāt \

legal Definition of depreciate

depreciated; depreciating
transitive verb
: to subject to depreciation : lower the value of
intransitive verb
: to fall in value — compare appreciate


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