1. The diminution in value of a *capital asset due to *wear and tear or *obsolescence over an accounting period. A provision for depreciation can be computed by means of a number of generally accepted techniques, including the *straight-line method, the *diminishing-balance method, the *sum of-the-digits method, the *production unit method, and the *revaluation method. The depreciation reduces the book value of the asset and is charged against income of an organization in the income statement or *profit and loss account. In the UK. Statement of Standard Accounting Practice 12 deals with the subject of depreciation in the accounts.
2. The reduction in value of one curre ncy in relation to other currencies.
