Question

what is the difference between amortization and depreciation?

Answer 1

There are two types of fixed assets:
Tangible assets: These are those fixed assets which can be seen and touched. Therefore, the expense on usage of such assets is termed as depreciation expenses for writing off the value of tangible fixed assets. For example: Depreciation expenses is charged on building, equipment, etc.
Intangibles assets: These are those assets which cannot be touched and seen but however help the business n generating revenues for a long time. Therefore, the usage of such assets is expensed as Amortization expenses. For example: Amortization expense on patents, goodwill.