Difference Between Depreciation And Amortization
1. Depreciation is the systematic allocation of the cost of an Tangible No n Current Asset over its useful life while Amortization is the systematic allocation of the cost of an Intangible No n Current Asset over its useful life. So, Depreciation is used for Tangible No n Current Assets while Amortization is applied on Intangible No n Current Asset. You may also Read Out, “ Similarities Between Depreciation And Amortization ” 2. Depreciation is charged on any Tangible No n Current Asset whether its cost is low or high while amortization is charged on those Intangible No n Current Assets which need Significant Cost (Very High) in developing or acquiring and it depends upon the market trends. So after studying above comparison, we can say that the term “Depreciation” is used for Tangible No n Current Assets while Amortization is used for Intangible No n Current Assets, otherwise these two terms are used for the same purpose i.e., allocati...