Depreciation is a term used in real estate, accounting, economics and finance to spread the cost of an asset over the span of several years. In other words we can say that depreciation is the reduction in the value of an asset due to usage, wear and tear, technological outdating or obsolescence. Most assets lose value over time, they depreciate, and must be eventually replaced, updated or repaired to maintain it's use.

In business depreciation is a decline in the value of a given currency in comparison with other currencies. For example, if the U.S. dollar depreciates against the Japanese Yen, buyers would have to pay more dollars in order to obtain the previous amount of Yens before depreciation occurred.