© 2014 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Depreciate

Definition:

The process of assigning the decline in value of a license or product over time. You buy a computer for $3600. The law says that you MUST depreciate it $100 a month for 36 months until, on your books, it is valued at zero. The thinking is that at the end of the period then you "know" you have to buy another computer. Many computers last more than 3 years though so the numbers get all messed up.

Advertisement