Depreciation

Definition 1:

The recognition of part of an asset’s cost as an expense during each year of its useful life. This expense can be calculated either by straight-line depreciation (the same dollar amount is assigned to each year) or by one of several accelerated methods in which the dollar amounts are weighted and/or cumulative.

Definition 2:

Any loss in value, whether due to market changes or wear and tear over time. Unless you are working in an accounting office, this is the meaning you will most often come across.

Examples:

There was so much depreciation on the car in its first year that it wasn’t worth trading in for a newer model.

The depreciation of the dollar makes the United States a travel and shopping destination for many Europeans.