Question

Answer the question.
What is the difference between Depreciation, Depletion and Amortisation?

Answer 1

Depreciation is the process of allocation of the cost of a fixed asset over the periods in which asset is used. The word 'Depletion' is used when we allocate the cost of some wasting assets or natural resources such as mines, oil wells, timber trees, etc. The term 'Amortisation' refers to the process of writing down the intangible assets such as goodwill, patents, etc. over their useful life.