Explain the Changes in Depreciation, Amortization, or Depletion Method.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 9Q: Explain the difference between depreciation, depletion, and amortization.
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Question
Explain the Changes in
Expert Solution
Step 1
Depreciation:
It refers to the reduction in the value of an asset due to factors like wear and tear, obsolescence etc.
Step 2
Amortisation:
It is similar to depreciation only difference is amortisation is applicable for intangible assets. Hence, amortised assets do not have any salvage value.
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