depreciation

A non-cash expense  that provides a source of free cash flow. Amount allocated during the period to amortize the cost of acquiring long term assets over the useful life of the assets.

The aging of an asset over a specified time frame (useful life). Assets such as automobiles decrease in value as time goes on.

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(I) In appraisal, a loss of value in property due to any cause, including physical deterioration, functional obsolescence and external obsolescence. (2) In real estate investment, an expense deduction for tax purposes taken over the period of ownership of income property.

Decline in value of a house due to wear and tear, adverse changes in the neighborhood, or any other reason.

A means for a firm to recover the cost of a purchased asset- over time- through periodic deductions or offsets to income. Depreciation is used in both a financial reporting and tax context- and is considered a tax benefit because the depreciation deductions cause a reduction in taxable income- thereby lowering a firm's tax liability.