A depreciation that involves an increase in the value of a fixed asset over time, rather than a decrease as usually would be the case. A negative depreciation adds value, and hence increases the original cost of long-term assets that an entity owns.

An asset, also, can have a negative cost. An asset usually depreciates in an entity’s books only until its remaining cost (depreciated cost) is equal to its salvage value, or until its remaining useful life is equal to zero. In contrast, assets with a negative cost accumulate negative depreciation and cannot depreciate past zero. In this situation, the asset cannot be further depreciated.

In general, negative depreciation reflects an increase in the cash flows or capital return generated, or expected to be generated, from an asset (such as real estate, acquisitions, internal research and development, etc.)

This is contrary to normal situations, where economic depreciation (positive depreciation) implies a decrease in asset values (in this sense, it is better described as positive depreciation). Normal depreciation implies a write-down of the value of an asset (a physical asset) over time.