depreciation

Vocabulary Word

Definition

You've probably heard of things losing their value over time. That's called 'depreciation'. It's like when a new car isn't worth as much after it's been driven for a year.

Examples in Different Contexts

In tech asset management, depreciation applies to hardware components, which tend to wear out or become obsolete. A CTO could comment, 'The depreciation of our servers means we should consider cloud-based solutions soon.'

Practice Scenarios

Real-Estate

Scenario:

This building has been a significant investment for us. However, we must consider potential costs related to aging and maintenance.

Response:

We must ensure regular maintenance to minimize depreciation damage due to age and natural wear.

Business

Scenario:

We have recently made some significant investments in office renovations and equipment upgrades. It's crucial to account for the corresponding costs.

Response:

We should account for depreciation in the budget, which will increase our productivity gains from these investments.