Definition for : Depreciation

Depreciation is the accounting recognition of the loss in Value of a Tangible fixed asset due to its use or its holding/ownership by the company. It thus covers two different phenomena: wear due to the use of a product (machines, fittings, careers, vehicles, buildings, etc.) and obsolescence, due to the fact that Fixed assets used by the company can become obsolete taking into account technological advances in the industry. Depreciation is a so-called "non-cash" charge insofar as it merely reflects arbitrary accounting assessments of the loss in Value. See also Amortisation.

(See Chapters Chapter 3 Earnings, Chapter 7 How to cope with the most complex points in financial accounts and Chapter 9 Margin analysis: Structure of the Vernimmen)

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