Answer
Depreciation refers to a situation where plant assets have decreased in carrying value. On the other hand, depletion of resources such as timber indicates that there is no more left to use because all the timber has been used up “depleted.” Whereas, amortization refers to expiration of intangible assets such as patents.
Work Step by Step
It is also important to note that the differences between the terms depreciation, depletion, and amortization imply a cost allocation of different types of assets.
