depreciate

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

Updated on: 11 Apr 2018

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

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depreciable

play \-shə-bəl\ adjective

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depreciatingly

play \-shē-ˌā-tiŋ-lē\ adverb

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depreciation

play \-ˌprē-shē-ˈā-shən\ noun

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depreciative

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

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depreciator

play \-shē-ˌā-tər\ noun

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depreciatory

play \-shə-ˌtȯr-ē\ adjective

See depreciate defined for English-language learners

See depreciate defined for kids

Examples of depreciate in a Sentence

These changes have greatly depreciated the value of the house.
The value of the house has depreciated greatly.

Recent Examples of depreciate from the Web

Hamilton County Auditor Dusty Rhodes said stadiums are a depreciating asset.

— cameron knight, Cincinnati.com, "After everything, Cranley pushing soccer stadium in the West End," 28 Mar. 2018
Hong Kong’s currency depreciated to the weakest level since the government widened a trading band against the greenback in 2005, putting pressure on the monetary authorities to slow its downward trajectory.

— Bloomberg.com, "Hong Kong Dollar Drops to Lowest Since Band Implemented in 2005," 2 Mar. 2018
Based on the Department of Revenue's figures, a $34,000 solar-panel array leased by a homeowner would have cost about $152 in property taxes in its first year, decreasing every year as the system depreciated.

— ryan randazzo, azcentral, "Solar customers don't have to pay some taxes, state Supreme Court rules," 16 Mar. 2018
In a vicious cycle, houses are expected to depreciate and are therefore not maintained, so second-hand homes are often dingy and depressing.

— The Economist, "Why Japanese houses have such limited lifespans," 15 Mar. 2018
Musk has touted the benefits of car sharing, noting that the practice offers car owners the chance to monetize a depreciating asset that often sits idle for large chunks of the day.

— peter holley, Washington Post, "Here's the quickest way to get behind the wheel of a Tesla Model 3," 10 Jan. 2018
This may suggest that foreign investors require a higher return to persuade them to put their money in a depreciating currency.

— The Economist, "ButtonwoodThe dollar keeps weakening. Is that good news for the world?," 31 Jan. 2018
Inflation is on the rise, and the currency is depreciating against the dollar.

— sabrina karim, Washington Post, "Liberia has a new president. Here are 3 things to watch for in his first 100 days.," 29 Jan. 2018
But because luxury vehicles tend to depreciate more quickly than everyday cars, the price difference often narrows as the cars age.

— matt jones, edmunds, USA TODAY, "Edmunds: Before buying used car, consider luxury alternative," 19 Jan. 2018

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

NEW! Time Traveler

First Known Use: 15th century

See Words from the same year

depreciate Synonyms

Phrases

dump on;

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

Other Economics Terms

actuary, compound interest, globalization, indemnity, portfolio, rentier, stagflation, usurer

Financial Definition of DEPRECIATE

depreciation

noun

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.

Source: Investing Answers