As I understand it, depreciation operates at a percentage rate per
year of the residual value so while the value of the asset may drop
to low levels, it can never reach zero. It's good for durable items.
Amortisation allows the item to 'die' within a set period of time by
depreciating by a percentage of the starting value, not the residual.
Consequently a Mac should be depreciated in the conventional way but
a Windoze machine amortised as it's useless within a short time. :-)
Andrew Fildes (who just bought a 7 year old long amortised Mac G4
tower for $50, installed a bit more ram, CS1 and OSX-3 and has it
working just fine thanks).
afildes@xxxxxxxxxxxxx
On 22/08/2008, at 5:50 PM, Chris Barker wrote:
> Amorisation and depreciation seem to be pretty well interchangeable in
> this country, but presumably the former is the process of taking the
> value to zero, while the latter takes is part way. The process is the
> same, as is the intention: to show the loss of value of an asset in
> the accounts, however it is reconciled.
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