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What Is the Difference Between Amortisation and Depreciation?

What Is Amortisation?

What Is Depreciation?

What are the Differences between Amortisation and Depreciation?

The primary differences between amortisation and depreciation are as follows:




Nature of asset

It covers intangible assets of a company.

It considers tangible assets of the company.

Value of an asset

It covers only the original cost of an asset.

Depreciation includes both the original cost as well as the salvage value of an asset.

Method of computation

You can calculate amortisation using the straight line method only.

Companies can calculate depreciation using the accelerated method or the straight line method.

Similarities Between Amortisation and Depreciation

Frequently Asked Questions