EP 14: $300k in Appreciation in Just 4 Years!!!

Updated: Apr 25, 2021



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What Is Appreciation? Appreciation, in general terms, is 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 in value over time.


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.


KEY TAKEAWAYS

  • Appreciation, in general terms, is an increase in the value of an asset over time.

  • 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.

  • Currency appreciation refers to the increase in the value of one currency relative to another in the foreign exchange markets.

SOURCE: INVESTOPEDIA.COM

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