Legal Definition of depreciation
1 : any decrease in the value of property (as machinery) for the purpose of taxation that cannot be offset by current repairs and is carried on company books as a yearly charge amortizing the original cost over the useful life of the property
— accelerated depreciation
: the depreciation of property that was put into use prior to 1980 which is allowed at a faster rate than normal under the depreciation rules in force before the adoption of the Accelerated Cost Recovery System
— straight-line depreciation
: depreciation of an asset by a fixed percentage of its original cost based on its estimated life
2 : a loss in the value of property due to physical deterioration and wear or to obsolescence and lack of adaptability
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