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 periodicals archive ?
Gillani also appreciated Team work of Agrihunt Volunteers the project of UAF Information in UAF and desired to launch this E-concept in other Pakistani universities.
In addition, the Pula appreciated against the Japanese Yen and the Euro by 0.
Khalida Mansoor MNA appreciated the youth skilled development scheme for middle-pass boys and girls with allocation of Rs 800 million.
The net result: Almost all of his IRA income is tax-free (we'll assume he can spend $98,000 of it, with $2,000 owed in taxes due to a not-quite-perfect offset of the deduction), and his appreciated securities will be worth $80,000 after taxes.
Next, the CRT sells or liquidates the appreciated assets and reinvests the net proceeds in other assets such as money market funds, marketable securities, and/ or other assets.
Typically, highly appreciated assets are good candidates for a CRT because the trustee can sell the assets and, as a tax-exempt entity, the trust will not be liable for capital gain taxes, so there are more funds available for investment.
He appreciated the value of timely reform and as a junior minister promoted reforms that included Catholic Emancipation, partial adjustment of parliamentary representation, decimal coinage, railway development, and support for libraries and the arts.
I found these occasions spiritually rewarding and appreciated the opportunity of sharing the commonality of Christian fellowship and growing through Christ.
Because of ADAA's contractual relationship with the Army, a donation of money or materials on an institutional level is not permissible, however, individual members may take actions that will be appreciated by army assistants.
In the end we are all happier, healthier and more productive when we feel appreciated and valued.
Player introductions will be particularly appreciated by the athletes whose games are not attended by large crowds, such as soccer, cross-country, softball, and field hockey.
As a result of her six-week counseling practicum in the Pastoral Care Department, Jana Saab, a gerontology student specializing in long-term care administration and pastoral care, found that she appreciated the excellent care provided at Bayley Place and expressed a desire to become part of this dedicated caregiving team.