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Finance & Banking vocabulary · Financial Statements

Depreciation

Meaning in finance & banking, with examples

/dɪˌpriːʃiˈeɪʃən/nounCommon term

In finance & banking, depreciation means: Spreading the cost of a long-term physical asset, such as a machine or building, over its useful life; also a fall in the value of a currency or asset.

In Turkish: amortisman, değer kaybı

How it is used

In accounting it is an expense in the income statement and the 'D' in EBITDA; for intangible assets the word is 'amortization'. In markets, 'depreciation of the lira' means the lira losing value against other currencies.

Example sentences

  1. Depreciation on the new equipment will reduce profit for the next five years.

  2. The depreciation of the currency raised the cost of imported goods.

Common collocations

  • depreciation expense
  • accumulated depreciation
  • straight-line depreciation
  • currency depreciation
  • EBITDAShort for earnings before interest, taxes, depreciation and amortization: a measure of a company's operating profit before financing costs and non-cash expenses.
  • assetSomething of value that a person or company owns or controls, such as cash, buildings, receivables or investments.
  • income statementA financial statement showing a company's revenue, costs and profit or loss over a period, such as a quarter or a year.
  • exchange rateThe price of one currency in terms of another, for example how many Turkish lira you need to buy one euro.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Financial Statements

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This page explains English vocabulary for learners. It is not financial advice.