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Amortization vs Depreciation

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Amortization and depreciation are both methods for accounting for capital costs over a period of time as defined by applicable tax regulations. The term amortization is used for the costs of intangible capital assets such as goodwill. The term depreciation is used for the costs of tangible assets such as buildings and equipment.
Business expenditures are classified as either capital or operational costs. Capital costs are long term investments in a business that are depreciated or amortized. Operational costs can be deducted when they occur.
Overview: Amortization vs Depreciation
Amortization Definition
The process of accounting for the cost of intangible capital assets over the term specified by applicable tax regulations.
Depreciation Definition
The process of accounting for the cost of tangible capital assets over their useful life.
Related Concepts
Next: Depreciation

Business Costs

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Applied Cost
Business Equipment
Capacity Cost
Capital Improvement
Carrying Costs
Closing Costs
Cost Of Capital
Cost Of Revenue
Cost Of Living
Direct Cost
Distress Cost
Fixed Costs
Friction Cost
Employee Costs
Holding Costs
Intangible Cost
Marginal Cost
Operating Cost
Operating Expenses
Legacy Costs
Outlay Cost
Lifetime Cost
Overhead Costs
Menu Costs
Relevant Cost
Normal Costs
Sunk Costs
Tangible Cost
Operational Costs
Travel Expenses
Unit Cost
Opportunity Cost
Variable Costs
Prospective Cost
Semi Variable Cost
Step Costs
Switching Costs
Transaction Costs
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