What is the difference between amortization and depreciation?

Amortization applies to intangible assets like patents and trademarks, while depreciation applies to tangible assets like equipment and buildings. Both processes allocate the cost of an asset over time.

How is amortization calculated?

Amortization is typically calculated by dividing the initial cost of the intangible asset by its useful life. For example, if a patent costs $100,000 and has a 10-year useful life, the annual amortization expense would be $10,000.

Why is amortization important for investors?

Amortization helps investors understand how companies are accounting for the cost of intangible assets over time. It affects a company’s financial statements, particularly the income statement, and can impact profitability and taxes.

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What is AMORTIZATION?

ANNUAL PERCENTAGE RATE (APR)

Annual Percentage Rate (APR) is the annual rate charged for borrowing or earned through an investment, expressed as a percentage.

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What is AMORTIZATION?

ANNUAL PERCENTAGE RATE (APR)

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