Depreciation / Amortisation
Definition of Depreciation / Amortisation
"Fixed or long-term assets have a ‘useful economic life’ and reduce in value over time.
Example of depreciation
For example, motor vehicles actually wear out and technology related assets may become obsolete.
Depreciation is a measure of how quickly these assets wear out over time.
Whereas ‘depreciation’ relates to tangible assets, the term ‘amortisation’ relates to intangible assets. "