Depreciation: defined by the Sticky-Marketing.com monthly magazine |
|
Depreciation is the amount of value an asset looses over a period of time and after use. Thus a car bought for 10,000 will not usually fetch that much when it is sold three years later after some use. Organisations buying assets will depreciate them on their books (balance sheets) over a time period trying sometimes to match the market value of the asset at any moment in time although with specialised or custom machinery or plant there may be negligible realisable value except as scrap or recycling of components. Valuation of assets is an area open to abuse for example in the valuation of stock and work in progress where there is no guarantee that stock of goods will ever be exchanged into cash. Companies may choose to depreciate the value of their stocks especially those that may have become slow moving or obsolete. 10/06/2001 Use your browser back button or
click here to visit the Sales & Marketing Glossary of Terms
| 
Home