Financial Statements
Depreciation and Amortization
Accounting charges that spread the cost of certain long-term assets over time.
Also called: D&A
What it means
Depreciation applies mainly to physical long-term assets like equipment and buildings, while amortization usually applies to certain intangible assets. These charges spread cost across the periods that benefit from the asset, rather than expensing it all at once.
Why it matters
They affect profit measures and are commonly added back in EBITDA, so users should understand what they do and do not represent.