Amortization and Depreciation

Synonyms

Amortization and depreciation have the same meaning. In some countries, the term provision is used in the context of items such as depreciation and impairment of assets; these kinds of provision are to be intended as adjustments to the carrying amounts of assets.

Definition

Proper definitions are provided in the International Accounting Sector Accounting Standards. In this document the references are to IPSAS 17, Property, Plant, and Equipment, and IPSAS 31, Intangible Assets.

Amortization:

Amortization is the systematic allocation of the depreciable amount of an asset over its useful life. In the case of an intangible asset, the term amortization is generally used instead of depreciation. Both terms have the same meaning.

Depreciation:

Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. In the case of a tangible asset, the term depreciation is generally used instead of amortization. Both terms have the same meaning.

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