Dictionary Home »
Business » underdepreciation
underdepreciation business definition
- Depreciation that is insufficient to allow for the eventual replacement of the asset being depreciated. Underdepreciation is generally caused by rising prices for replacement assets. Compare overdepreciation 1.
- Depreciation that causes an asset to be carried on a firm's books at a greater value than it would have if it were sold. Underdepreciation results in overstated earnings and assets on the firm's financial statements. Compare overdepreciation 2.
Learn more about underdepreciation