The word "depreciable" is spelled as /dɪˈpriːʃəbəl/. The first syllable of the word is pronounced as "di" with a short "i" sound (as in "sit"). The second syllable is pronounced as "pree" with a long "e" sound (as in "bee"). The third syllable is pronounced as "shə" with a short "a" sound (as in "cat"). Finally, the last syllable is pronounced as "bəl" with a short "u" sound (as in "but"). "Depreciable" is an accounting term that refers to an asset that loses value over time.
"Depreciable" is an adjective that refers to an asset or property that is subject to depreciation, a decrease in value over time due to wear and tear, obsolescence, or other factors. Specifically, it describes an item or investment that has a limited useful life and loses value gradually over time.
In accounting and finance, depreciable assets are those that are expected to provide benefits over multiple accounting periods. This can include tangible assets such as vehicles, machinery, buildings, or furniture, as well as intangible assets like patents, trademarks, or copyrights. These assets are recorded on a company's balance sheet and their value is systematically allocated as an expense, known as depreciation, over their estimated useful life.
Depreciation allows businesses to spread out the cost of an asset over its useful life, reflecting its diminishing value. The depreciable amount is typically the original purchase price or historical cost of the asset, less its estimated residual or salvage value, which is what the asset is expected to be worth at the end of its useful life.
Different methods can be used to calculate the depreciation expense, such as straight-line depreciation, declining balance, or units of production. By recognizing the decrease in value caused by the wear and tear or obsolescence of an asset, depreciable assets help companies accurately reflect their true financial standing and facilitate better decision-making regarding replacement, repairs, or future investments.
The word "depreciable" comes from the verb "depreciate". The term derives from the Latin verb "depretiare", which means "to lower the price, value, or worth of something". The Latin word "depretiare" is a combination of two components: "de" meaning "down" or "away", and "pretium" meaning "price" or "value". Over time, the term "depreciate" has been adapted into the adjective "depreciable", which refers to an asset or property that is subject to depreciation in value over time.