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Compare depreciation and amortisation.
The major differences between depreciation and amortization are as follows −
It determines asset useful life.
Charged on tangible assets.
Annual depreciation = (cost of tangible asset – salvage value)/useful life.
Have salvage value.
International accounting standard (IAS-16)/accounting standard (AS-6).
Residual value is considered.
Straight line method, reducing balance method, units of production method.
Determined on the basis of its legal or economic life.
Charged on intangible assets.
Annual amortisation = (cost of intangible asset)/useful life.
Don’t have salvage value.
International accounting standards (IAS-38)/accounting standard (AS-26).
Doesn’t considered residual value.
Straight line method.
- Compare accounting depreciation and tax depreciation.
- Describe the term amortisation in finance and accounting.
- Differentiate between sinking fund depreciation and annuity method of depreciation.
- Accounting Depreciation Vs Tax Depreciation
- Explain sinking fund depreciation.
- What is Accelerated Depreciation and how is it measured?
- Compare shares and debentures.
- Compare CAPEX and OPEX.
- Compare equity and commodity.
- Compare credit and debit.
- Compare time and money.
- Compare industry and sector.
- Compare bidding and auction.
- Compare budget and forecast.
- Compare corporation and incorporation.