Appreciation

What Does Appreciation Mean?

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 over time.

Investopedia explains Appreciation

This term can be used to refer to an increase in any type of asset such as a stock, bond, currency
or real estate. For example, the term 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.

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.