Depreciation

Definition

The accounting practice of acknowledging that everything you own is slowly becoming worthless, which is depressing when applied to assets and relatable when applied to your car. It's basically writing a slow obituary for office furniture.

Example Usage

"According to depreciation, our $50,000 server is now worth $12. We still use it every day. It has feelings too, you know."

Related Terms

Advanced

yield to maturity

The total return anticipated on a bond if held until it matures, accounting for current price, par value, coupon interest, and time to maturity. It's what you'll earn assuming the issuer doesn't default, which is a bigger assumption than bond investors like to admit.

💰 Finance / Accounting

Advanced

smoothing

The practice of manipulating earnings to reduce volatility and create the appearance of steady, predictable growth, because investors apparently can't handle reality. It's the financial equivalent of Instagram filters for your P&L.

💰 Finance / Accounting

Intermediate

IPO

Initial Public Offering, the moment a private company decides to let random strangers on the internet buy and sell pieces of it. It's like inviting the entire neighborhood to become co-owners of your lemonade stand and then wondering why everyone has opinions.

💰 Finance / Accounting

Intermediate

Enterprise Value

A company's total value including debt and excluding cash, representing what you'd pay to own it outright and settle all obligations. It's market cap's more sophisticated cousin that actually understands capital structure.

💰 Finance / Accounting

Intermediate

capitalization

Either the total value of a company's outstanding shares (market cap) or the act of writing things with capital letters—context matters. In finance, it's how much the market thinks your company is worth, which may bear no resemblance to reality. Also refers to recording costs as assets rather than expenses, because accountants love making things complicated.

💰 Finance / Accounting

Intermediate

exemption

A magical loophole in the tax code that lets you keep slightly more of your own money, usually granted for dependents, disabilities, or other life circumstances the government deems worthy of pity. It's the carrot in a system that's mostly stick. Your accountant mentions these in hushed, reverent tones.

💰 Finance / Accounting

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Intermediate

resume inflation

The academic version of grade inflation where institutional pressure leads to padding CVs with dubious achievements, min...