There are two ways to define depreciation, and it is important not to confuse them. Depreciation in accounting is the cost of property or equipment that is allocated to a period, to show how much of the property or equipment was used during the period. We depreciate our computers over a five-year life. We are optimistic. Depreciation in economics refers to the decrease in the value of an asset. I saw my new car depreciate by 50% the minute I drove it off the lot.
Please sign me up for program updates and other learning opportunities.