| A | B |
|---|
| Accelerated Depreciation | Method of computing depreciation that yields higher annual depreciation in the early years of an assets's life |
| Amortization | (1) The process of allocating the cost of intangible assets to periodic expense. (2) An adjustment to interest expenses (for either a premium or a discount) to reflect the effective interest being incurred on bonds. This periodic adjustment results in the convergence of the carrying value of a bond to its face value over time. |
| Book Value | The long-term asset cost remaining to be allocated to future periods; computed as historical cost less accumulated depreciation. |
| Composite Depreciation | Computation of depreciation on an entire group of related but dissimilar assets as if the group were one asset. |
| Declining-Balance Depreciation | Computation of periodic depreciation expense with a decreasing amount of depreciation recognized in each successive period, based on depreciation of a fixed percentage of a declining book value. |
| Depletion | Process of allocating the cost of mineral and other natural resource asset to periodic expense. |
| Depreciation | Process of allocating the cost of tangible long-term assets to periodic expense. |
| Double-Declining Balance Method | Computation of periodic depreciation expense with depreciation equal to double the straight-line rate multiplied by a declining book value. |
| Gain | Amount by which the preceeds from disposing of an asset exceed the book value of the asset. |
| Group Depreciation | Computation of depreciation on an entire group of similar assets as if the group were one asset. |
| Impairment | Reduction in the expected cash flow to be generated by a long-term asset sufficient to warrant reducing the recorded value of the asset. |
| Indicated Gain | The excess of the market value over the book value of the asset given up in an exchange of assets. |
| Indicated Loss | The excess of the book value over the market value of the asset given up in an exchange of assets. |
| Loss | Amount by which the proceeds from disposing of an asset are less than the book value of the assets. |
| Natural Resources | Products of the earth, such as oil, gold, and timber. Also called wasting assets |
| Productive-Output Depreciation | Computation of periodic depreciation expenses based on how many units of output were produced during the period relative to estimated total lifetime output units. |
| Residual (Salvage) Value | Estimate of the amount for which an asset can be sold when it is retired. |
| Service-Hours Depreciation | Computation of periodic depreciation expense based on how many hours of service were used during the period relative to estimated total lifetime service hours. |
| Straight-Line Depreciation | Computation of periodic depreciation expense with an equal amount of depreciation recognized in each year. |
| Sum-of-the-Years'-Digit Depreciation | Computation of periodic depreciation expense with a decreasing amount of depreciation recognized in each successive period, based on a fraction derived from the sum of the digits from one to the asset's original useful life. |
| Time-Factor Depreciation | Computation of periodic depreciation expense based on the passage of time |
| Unit Depreciation | Computation of depreciation on an individual asset as a separte unit. |
| Use-Factor Depreciation | Computation of periodic depreciation expense based on how much the asset is used during the period. |
| Useful Life | Length of time over which a long-term asset is forecasted to provide economic benefits. |
| Accelerated Cost Recovery System (ACRS) | Adaptation of the declining-balance depreciation method introduced for tax purposes in 1981 and subsequently modified. |
| Half-Year Convention | Assumption sometimes used in computing depreciation; one-half of year's depreciation is recognized for assets acquired or disposed of during a year. |
| Modified Accelerated Cost Recovery System (MACRS) | Modification of the ACRS tax depreciation method that is based on declining-balance depreciation, fixed cost recovery periods, and no residual values. |
