Amortization is most similar to depreciation except that amortization applies to:

Giải thích

Amortisation spreads the cost of an intangible asset such as purchased goodwill, a covenant not to compete or an acquired licence over its life, as IRC §197 requires over fifteen years for most acquired intangibles. Cash is not consumed over time and carries no cost to allocate. Liabilities are amounts owed, not assets with a cost basis. And land is the classic asset that is neither depreciated nor amortised, because it does not wear out.