What is the term for a decrease in value over time?

Depreciation is the term used to describe a decrease in value over time, particularly in the context of assets such as vehicles, machinery, or property. It reflects the loss of value that occurs as an item ages or due to usage, wear and tear, or technological obsolescence. Understanding depreciation is essential in various fields, including accounting and finance, as it directly impacts the financial statements of businesses and helps in assessing the true value of assets over their useful lives.

The concept of depreciation is crucial for determining the value of an asset at any given point, facilitating informed decisions regarding investment, disposal, or replacement of that asset. As businesses calculate depreciation, they often use methods like straight-line depreciation or declining balance to systematically allocate the asset's cost over time.

The other terms listed have distinct meanings: devaluation typically refers to a reduction in the value of a country's currency in relation to other currencies, depression refers to a prolonged period of economic downturn, and appreciation denotes an increase in value, which is the opposite of depreciation. Each of these terms serves specific purposes in economic discussions, but for the concept of decreasing value over time, depreciation is the correct and widely accepted term.