depreciated

Depreciated is the past tense and past participle of depreciate. In general use, to depreciate means to reduce value or importance. In economics and accounting, depreciation refers to the systematic allocation of the cost of a tangible asset over its useful life, reflecting wear, aging, and obsolescence. An asset described as depreciated has had its value reduced through this process, lowering its carrying amount.

Common depreciation methods include straight-line, which assigns equal annual expense; and accelerated methods such as declining-balance or sum-of-years-digits, which expense more in early years. Some assets use units-of-production based on usage. Residual value and useful life determine the depreciation calculation and the pattern of expense over time.

Depreciation affects financial statements by reducing net income via depreciation expense and lowering asset value via accumulated depreciation. It is a non-cash charge. Tax rules often allow depreciation deductions for tax purposes, creating a timing difference between accounting income and taxable income. Impairment is a separate write-down when market value drops more than planned depreciation.

Depreciation can also describe currency value changes when a currency falls relative to others, influenced by market forces, inflation, and policy. Currency depreciation impacts import costs and inflation.

In software, the term deprecated is used for features slated for removal and is distinct from depreciated.