Answer
Depreciation relates to decaying value of a tangible asset mainly subject to time and usage. Depletion relates to assets whose usage reduces the amount available for utilization until there is none left. For example, stored water which will reduce with usage till there is none left. One the other hand, Amortization relates to charging the cost of an asset to an expense over time until it’s fully written off to the income statement. For example, amortizing the cost of insurance over the policy period.
Work Step by Step
As summarized above.
