In the financial world, the term that is used to describe the increase in value of an asset which occurs over time is known as appreciation. For the purpose of accounting understanding appreciation can be important, as in addition to playing a role in calculation of taxes, it can also influence the numbers that are there on a company’s balance sheet.
What kind of Assets Appreciate?
There is a wide variety of assets that have the ability to appreciate. As a general rule, anything that is used as an investment is capable of appreciation. Real estate, art, stocks, bonds, and similar assets are included in this.
