Depreciation

I. Formal Definition

The systematic allocation of the cost of a tangible long-lived asset over its useful life, recognised as an expense in each period. Depreciation reduces the asset's carrying value on the balance sheet via accumulated depreciation. The federation requires depreciation methods to be consistent with the relevant accounting standard, with any change in method or useful life disclosed and quantified in the period of change. Component depreciation, where required by IFRS, must be reported with the same granularity as the underlying asset register per MEV-Annex:4.1.

II. Etymology

From the Latin depretiare, to lower in value; the systematic accounting technique stabilised in nineteenth century railway accounting.

III. Federation Usage

Federation members disclose depreciation policies, useful lives, and any policy changes. Cross-period changes in depreciation method are reportable under TGS-002:2.3 with quantified impact disclosed in the quarter of change.

IV. Related Terms

• amortization
• capex
• accumulated-depreciation
• tangible-asset

V. Authoritative Citations

• UFMS-001:3.1UFMS Article III - Depreciation Policy
• MEV-Annex:4.1MEV Annex IV - Depreciation Reporting

VI. Citation in BibTeX

@misc{ifo4_glossary_depreciation,
  title        = {{Depreciation}},
  author       = {{IFO4 Federation Editorial Board}},
  howpublished = {{IFO4 Federation Glossary, slug \texttt{depreciation}}},
  year         = {2026},
  url          = {https://ifo4.org/glossary/depreciation},
  note         = {Category: Capital; key: Depreciation}
}

VII. Challenge This Definition

Federation members and accredited practitioners may challenge any entry under TGS-002:1.7. Filed challenges are routed to the editorial board, triaged into the revision register, and resolved in writing on the public docket. The slug remains stable through any revision.