What term refers to the decrease in an asset's value over time due to various factors?

The correct answer is depreciation. This term specifically describes the reduction in an asset's value as it ages or due to wear and tear, obsolescence, or market conditions. Depreciation is a crucial concept in accounting and finance, where it allows businesses to allocate the cost of tangible assets over their useful lives. This reduction is typically calculated using various methods, including straight-line or declining balance, providing a systematic way to reflect the asset's decreasing value on the financial statements.

In contrast, appreciation refers to an increase in an asset's value over time, which is not relevant in this context. Devaluation generally applies to currency, indicating a reduction in its value relative to other currencies, and is not applicable when discussing physical assets. Meanwhile, depreciation reserve is a term that refers to the accumulated amount of depreciation that has been recognized for an asset but is not the term for the process of value decrease itself. Therefore, depreciation is the term that accurately captures the decrease in an asset's value over time due to various influencing factors.