appreciation

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Appreciation

Increase in the value of an asset.

Appreciation

An increase in value of a property or other asset. Most property depreciates, and it is fairly rare to discuss a property's appreciation. Real estate and securities are major exceptions, since real estate tends to appreciate over time and securities may increase or decrease in value depending on market conditions. Appreciation may be used to calculate capital gains or property taxes. See also: Capital appreciation.

appreciation

1. An increase in value, as of an asset.
2. Used to distinguish between securities that are likely to provide profits because of increases in price and those that provide dividend payments.

Appreciation.

When an asset such as stock, real estate, or personal property increases in value without any improvements or modification having been made to it, that's called appreciation.

Some personal assets, such as fine art or antiques, may appreciate over time, while others -- such as electronic equipment -- usually lose value, or depreciate.

Certain investments also have the potential to appreciate. A number of factors can cause an asset to appreciate, among them inflation, uniqueness, or increased demand.

appreciation

or

capital appreciation

  1. an increase in the price of an ASSET. Assets held for long periods, such as factory buildings, offices or houses, are most likely to appreciate in value because of the effects of INFLATION and increasing site values, though the value of short-term assets like STOCKS can also appreciate. Where assets appreciate their REPLACEMENT COST will exceed their HISTORIC COST and such assets may need to be revalued periodically to keep their book values in line with their market values.

    See DEPRECIATION, definition 1, INFLATION ACCOUNTING, REVALUATION PROVISION.

  2. an increase in the EXCHANGE RATE of a currency against other currencies under a FLOATING EXCHANGE RATE SYSTEM, reflecting an increase in market demand for that currency combined with a decrease in market demand for other countries’ currencies. The effect of an appreciation is to make imports (in the local currency) cheaper, thereby increasing import demand, and EXPORTS (in the local currency) more expensive, thereby reducing export demand, ultimately working towards keeping a country's BALANCE OF PAYMENTS in equilibrium on a more or less continuous basis.

    Appreciations, like REVALUATIONS, can adversely affect the profitability and market position of domestic firms by making imports more price competitive in the home market and, similarly, reducing their price competitiveness in export markets. See REVALUATION, definition 2, for further discussion. Contrast with DEPRECIATION, definition 2, EXCHANGE RATE EXPOSURE.

appreciation

  1. 1 an increase in the value of a CURRENCY against other currencies under a FLOATING EXCHANGE-RATE SYSTEM. An appreciation of a currency's value makes IMPORTS (in the local currency) cheaper and EXPORTS (in the local currency) more expensive, thereby encouraging additional imports and curbing exports, so assisting in the removal of a BALANCE OF PAYMENTS surplus and the excessive accumulation of INTERNATIONAL RESERVES.

    How successful an appreciation is in removing a payments surplus depends on the reactions of export and import volumes to the change in relative prices; that is, the PRICE ELASTICITY OF DEMAND for exports and imports. If these values are low, i.e. demand is inelastic, trade volume will not change very much and the appreciation may in fact make the surplus larger. On the other hand, if export and import demand is elastic then the change in trade volumes will operate to remove the surplus. BALANCE-OF-PAYMENTS EQUILIBRIUM will be restored if the sum of export and import elasticities is greater than unity (the MARSHALL-LERNER CONDITION). See REVALUATION for further points. Compare DEPRECIATION 1. See INTERNAL-EXTERNAL BALANCE MODEL.

  2. an increase in the price of an ASSET and also called capital appreciation. Assets held for long periods, such as factory buildings, offices or houses, are most likely to appreciate in value because of the effects of INFLATION and increasing site values, though the value of short-term assets like STOCKS can also appreciate. Where assets appreciate, then their REPLACEMENT COST will exceed their HISTORIC COST, and such assets may need to be revalued periodically to keep their book values in line with their market values.

    See DEPRECIATION 2, INFLATION ACCOUNTING.

appreciation

The process of increasing in value. As a practical matter, although the IRS allows taxpayers to depreciate real property improvements as if they were becoming less valuable over time and will eventually be worthless, real property generally appreciates over time with proper maintenance and repair.

References in classic literature ?
I could have hugged that discerning and indulgent critic, able to look beyond the result to the intention, and appreciating the difficulties of every kind that had been in the way.
perhaps a little sorry for the girl and as usual without a penny in his pocket, appreciating the comfortable quarters, wishing to linger on as long as possible in the shameless enjoyment of this already doomed luxury.
And he added some praise of you, which you would not thank me for repeating, nor him for uttering; proclaiming it aloud, as he did, without delicacy or discrimination, in an audience where it seemed profanation to utter your name: himself utterly incapable of understanding or appreciating your real excellences.
We ate our dinner in the best of humours, and I had no difficulty in appreciating the feelings of certainty which both Rouletabille and Larsan felt.
Our capacity of appreciating the beauties of the earth we live on is, in truth, one of the civilised accomplishments which we all learn as an Art; and, more, that very capacity is rarely practised by any of us except when our minds are most indolent and most unoccupied.
She directed upon me her grey eyes shaded by black eyelashes, and I became aware, notwithstanding my years, how attractive physically her personality could be to a man capable of appreciating in a woman something else than the mere grace of femininity.
He claims that the power of producing and appreciating it existed among the human race long before the power of speech was arrived at.
In other respects the true Dodson was partly latent in Tom, and he was as far from appreciating his "kin" on the mother's side as Maggie herself, generally absconding for the day with a large supply of the most portable food, when he received timely warning that his aunts and uncles were coming,--a moral symptom from which his aunt Glegg deduced the gloomiest views of his future.
The meeting ended on a high note with Defence Minister appreciating the contribution of the Germany in areas of social development too.
Appreciating the PM measures for giving opportunities to the youth to earn their livelihood by taking advantage of the schemes, they said that this announcement is in line with the PML-N manifesto.
LIVERPOOL consultancy Appreciating People has launched a new venture to help third sector organisations.