Total Depreciation and Amortization

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Definition

Total amount of depreciation and amortization a company has in the current period. It is important in accrual accounting to understand the use of an asset's life and its writedown.

Depreciation is the measuring how much of a tangible's asset was used during that period. For instance, if a computer was purchased for 500 dollars and had a expected usefulness of 5 years, a straight line depreciation for this would be about 100 dollars.

Amortization on the hand is the measure of use of an intangible asset's cost during a period. Intangible assets include assets such as goodwill, patents.

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