Diminishing Value Definition: A method of calculating depreciation expense by allocating the cost of an asset where the annual charge is based on the declining book value of the asset after deducting the prior period's depreciation.Home Download material Contact us Privacy policy Link to us Advertise. method of calculating depreciation expense by allocating the cost of an asset where the annual charge is based on the declining book value of the asset after deducting the prior period's depreciation. Home Download material Contact us Privacy policy Link to us Advertise.