Amortization

What is the depreciation in accounting terms? Please explain me in simple terms and not in terms of book

ok and now for a simple answer.

Suppose we sell 100 products each + £ 1 off a tooling charge of £ 50.

the customer gets charged £ 100 + £ 50 of tooling products

or we can write it off and they pay £ 1.50 each for the departure 100. their costs the same its just a way to put the charge on the product they actually belong too. in this case of course the next time the customer orders 100 anothe They end up paying a high price, because the equipment is already in place. but hey, sometimes the customers are stupid like that and not want to see "extras" anyway someone pays for them - lol

It's like depreciation, but on intangibles. example. brand names of good will.

Entities frequently expend resources, or incur liabilities for the acquisition, development, maintenance or enhancement of intangible resources such as:

* Scientific or technical knowledge
* Design and implementation of new processes or systems
* Licensing
* IP
market knowledge *
* Trademarks (including brand names and publishing titles)

Most of the above expenses are intangible assets that can be defined as an identifiable non-monetary asset without physical substance. If we divide the expenditure incurred on top of its expected useful life, so this process is called amortization.

To keep more simlpe if you obtained a license for 5 years for SKY watch your progrme and it cost you 500.then GB per year amortization will GB100.

I hope this will help.

its some sort of calculation culmulative - its mode of operation of mortgage repayments.