What is Appreciation?

Appreciation is typically referred to the value increase of an investment over time.

Appreciation may result from increase in demand for a specific asset, decreasing supply of the asset, changes in inflation, or interest rates.

In accounting, an upward adjustment made in the accounting books is an asset that has appreciated in value.

Term appreciation can be used for any asset that has increased in value over time - assets such as property, stocks, currency.

Capital appreciation

This refers to value increase of a capital asset such as a stock. This may be due to favorable economic conditions, or improved performance of the corresponding company.

Currency appreciation

Currency can appreciate in value in reference to another currency. If a Euro appreciates in regards to the Dollar, this means that you can be more Dollars for the same amount of Euros than you were able to previously.