What is the term for the reduction in value of an asset due to factors such as time and usage?

The term for the reduction in value of an asset due to factors such as time and usage is depreciation. This concept is specifically related to the decrease in an asset's value over time, often due to wear and tear, age, or obsolescence. In the context of real estate or personal property, depreciation is an important factor that investors and property owners consider, as it can affect the asset's resale value or the tax implications tied to its ownership.

Appreciation, on the other hand, refers to an increase in value, while amortization typically applies to the gradual repayment of a loan or the gradual expense recognition of intangible assets. Obsolescence may contribute to depreciation but is a broader term referring to the loss of value due to factors such as outdated technology or changing market preferences, rather than the systematic loss of value over time. Therefore, depreciation accurately describes the specific reduction in value due to usage and the passage of time.