amortization vs depreciation
Definitions
noun
- payment of an obligation in a series of installments or transfers
- the reduction of the value of an asset by prorating its cost over a period of years
Examples
Kraft's offer was reportedly worth 12 times Cadbury's 2009 earnings before interest, tax, depreciation and amortisation, which is still less than similar takeovers, the UK company said.
The pretax figures don't include intangible amortization costs and rent shortfalls on sublet properties.
When you use the amortization or annuity method, you must factor in an annual interest rate.
Definitions
noun
- decrease in value of an asset due to obsolescence or use
- a decrease in price or value
- a communication that belittles somebody or something
Examples
Depreciation of furniture and equipment is computed on the straight-line basis over estimated useful lives of five to ten years.
The story in Romania is broadly similar, though it did receive a boost from the depreciation of the leu.
Earnings before interest, depreciation and tax doubled to 600,000.
