What is the difference between Depreciation Depletion and Amortization

What is the difference between depreciation, amortization and depletion?

Uncategorized Mar 24, 2016
 

The one thing that Depreciation, Amortization and Depletion all have in common is that they all refer to Assets. More specifically, they record the value of an asset that gets used up over time.

Depreciation specifically refers to most tangible assets such as equipment and automobiles, but such tangible assets specifically exclude natural resources.

Depletion is the form of depreciation that refers to natural resource assets such as mines, gravel pits, oil wells and the such.

Finally, Amortization is a form of depreciation that applies to intangible assets that you cannot touch or feel, such as goodwill.

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