Currency depreciation is the loss of value of a country's currency with respect to one or more foreign reference currencies, typically in a floating exchange rate system. It is most often used for the unofficial increase of the exchange rate due to market forces, though sometimes it appears interchangeably with devaluation. Its opposite is called appreciation. A floating exchange rate or a flexible exchange rate is a type of exchange rate regime wherein a currencys value is allowed to fluctuate according to the foreign exchange market. ... Devaluation is a reduction in the value of a currency. ...
In contrast, (currency) depreciation is most often used for the unofficial decrease in the exchange rate in a floating exchange rate system.
Historically, early currencies were typically coins stamped from gold or silver by an issuing authority which certified the weight and purity of the precious metal.
Later, paper currencies were issued, and governments decreed them to be redeemable for gold or silver (a gold standard).
Straight-line depreciation is figured by first taking the original cost of an asset and subtracting the estimated value of the asset at the end of its useful life, to arrive at the depreciable basis.
Depreciation is often mistakenly seen as a basis for recognizing "wear and tear", obsolescence, or impairment on an asset, but these issues, where seen as significant enough to account for, are handled through an asset revaluation reserve.
Straight-line depreciation is the simplest and most often used technique, in which the company estimates the "salvage value" of the asset after the length of time over which it is depreciated, and assumes the drop in the asset's value is in equal, constant yearly increments over that amount of time.
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