Unlike traditional depreciation, which is based on a predetermined formula (approximating the rate of value decline), condition-based depreciation is a direct measure of the run down in asset value. Asset condition is measured by its deviation from 'as new'.

It is important to note that in many countries, the generally accepted accounting practices (GAAP) preclude the use of condition based depreciation in financial statements for external reporting purposes. IIMM

Condition-Based Depreciation is the determination of accumulated depreciation as the cost in any reporting period of restoring an asset's gross service potential, based on the condition of the asset within the period. Changes from year to year in cumulative depreciation so determined represent the annual depreciation. LGAM

The determination of accumulated depreciation as the cost in any reporting period of restoring an asset’s gross service potential, based on the condition of the asset within the period. Changes from year to year in the cumulative depreciation so determined represent the annual depreciation. DERM