Question

An increase in the value of fixed asset is referred to as _________.

• A. depreciation
• B. appreciation
• C. market capitalization
• D. reverse depreciation

Answer 1

The correct option is B appreciation

Appreciation is an increase in the recorded value of an asset. In other words, appreciation is the opposite of depreciation.

An asset can increase in value for a number of reasons. Some of the most common causes of appreciation include:

• Increased demand for the asset
• A reduced supply
• Inflation
• Adjustments made to interest rates.

Appreciation can occur with both tangible and intangible assets. For example, it is common for trademarks to increase in value due to a rise in brand recognition.