Appreciation

AAA

DEFINITION of 'Appreciation'

An increase in the value of an asset over time. The increase can occur for a number of reasons including increased demand or weakening supply, or as a result of changes in inflation or interest rates. This is the opposite of depreciation, which is a decrease over time.

INVESTOPEDIA EXPLAINS 'Appreciation'

This term can be used to refer to an increase in any type of asset such as a stock, bond, currency or real estate. For example, the term capital appreciation refers to an increase in the value of financial assets such as stocks, which can occur for reasons such as improved financial performance of the company.

The term is also used in accounting when referring to an upward adjustment of the value of an asset held on a company's accounting books. The most common adjustment on the value of an asset in accounting is usually a downward one, known as depreciation, which is typically done as the asset loses economic value through use, such as a piece of machinery being used over its useful life. While appreciation of assets in accounting is less frequent, assets such as trademarks may see an upward value revision due to increased brand recognition.

RELATED TERMS
  1. Capital Appreciation

    A rise in the value of an asset based on a rise in market price. ...
  2. Asset

    1. A resource with economic value that an individual, corporation ...
  3. Unrealized Gain

    A profit that exists on paper, resulting from any type of investment. ...
  4. Depreciation

    1. A method of allocating the cost of a tangible asset over its ...
  5. Remeasurement

    The re-evaluation of the value of an asset or liability within ...
  6. Cramer Bounce

    The sudden overnight appreciation of a stock's price after it ...
Related Articles
  1. Active Trading

    An Introduction To Depreciation

  2. Economics

    Economics Basics

  3. Home & Auto

    Measuring The Benefits Of Home Ownership

  4. Forex Education

    Depreciation: Straight-Line Vs. Double-Declining ...

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center