This section provides a treatment of the handling of depreciation and appreciation of assets in GnuCash.
It also provides a brief introduction to the related tax issues.
Warning: Be aware that different countries can have substantially different tax policies for handling these things; all that this document can really provide is some of the underlying ideas to help you apply your "favorite" tax/depreciation policies.
Note that appreciation and depreciation of assets tend to be treated somewhat differently:
Depreciation is usually recognized (the technical term is accrued) as an expense on an ongoing basis, gradually reducing the value of an asset towards zero.
Depreciation tends to only get calculated on assets that are used for professional or business purposes, because governments don't generally allow you to claim depreciation deductions on personal assets, and it's pointless to bother with the procedure if it's not deductible.
In contrast, Capital Gains, which could be called asset value appreciation, are typically not recognized until some time down the road when the asset is sold, and at that instant, the entire gain becomes income.
Unlike depreciation, governments tend to be quite interested in taxing capital gains in one manner or another.
(As always, there are exceptions. If you hold a bond that pays all of its interest at maturity, tax authorities will often require that you recognize interest each year, and refuse this to be treated as a capital gain. The phrases accrued interest, or imputed interest are often there to scare those that are sensitive to such things...)