Question:
The difference between depreciation and amortization allowances in tax calculation is that
The difference between depreciation and amortization allowances in tax calculation is that
Show Hint
If you can physically touch the asset → depreciation. If the asset is non-physical (legal rights, software, goodwill) → amortization.
Updated On: Dec 26, 2025
- depreciation is for a tangible asset applicable on its declared life; whereas amortization is for an intangible asset applicable on a specified period.
- depreciation is for an intangible asset applicable on its declared life; whereas amortization is for a tangible asset applicable on a specified period.
- depreciation is for a tangible asset applicable on a specified period; whereas amortization is for an intangible asset applicable on its declared life.
- depreciation is for an intangible asset applicable on a specified period; whereas amortization is for a tangible asset applicable on its declared life.
Hide Solution
Verified By Collegedunia
The Correct Option is A
Solution and Explanation
Depreciation and amortization are both methods used for spreading the cost of assets over time, but they apply to different types of assets. Depreciation applies to tangible assets such as machinery, buildings, and vehicles. These assets have a measurable physical form and their value decreases due to usage, wear-and-tear, or aging. The reduction is spread over the declared useful life of the asset.
Amortization applies to intangible assets such as patents, trademarks, copyrights, goodwill, and software. These assets do not have physical form, and instead of a declared life, a specified time period (legal validity or contractual duration) is used for spreading the cost.
Thus, option (A) correctly matches depreciation with tangible assets and amortization with intangible assets.
Amortization applies to intangible assets such as patents, trademarks, copyrights, goodwill, and software. These assets do not have physical form, and instead of a declared life, a specified time period (legal validity or contractual duration) is used for spreading the cost.
Thus, option (A) correctly matches depreciation with tangible assets and amortization with intangible assets.
Was this answer helpful?
0
0
Questions Asked in GATE MN exam
- The safety device used to arrest forward runaway tubs in rope haulage is
- GATE MN - 2025
- Mine planning and its components
- A direct rope haulage has the following details:
Output = 24 tonne/hour,
Length of trip = 610 m,
Gradient = 1 in 12,
Capacity of mine car = 1.0 tonne,
Tare weight of mine car = 0.5 tonne,
Average rope speed = 1.694 m/s,
Change over time of cars = 3 minutes,
Acceleration due to gravity = 10.0 m/s².
Neglecting all frictional resistance and mass of the rope, the minimum power required, in kW, to raise the loaded mine cars is:- GATE MN - 2025
- Mine planning and its components
- The chemicals used in a foam type fire extinguisher are
- GATE MN - 2025
- Fire Safety
- A longwall panel is to be developed in a flat seam at a depth of \( H \) m. The surface subsidence profile (\( s \)) of the area with the horizontal distance \( x \) is estimated as \[ s = \frac{S_{{max}}}{2} \left[ 1.002 - \tanh \left( \frac{4.8x}{H} \right) \right], \] where \( S_{{max}} \) is the maximum subsidence at the centre of the panel, \( x \) is measured from the inflection point. The value of \( x \) is negative towards the panel centre and positive towards the panel boundary. The ratio between the critical width of the panel and the depth is:
- GATE MN - 2025
- Mine planning and its components
An electricity utility company charges ₹7 per kWh. If a 40-watt desk light is left on for 10 hours each night for 180 days, what would be the cost of energy consumption? If the desk light is on for 2 more hours each night for the 180 days, what would be the percentage-increase in the cost of energy consumption?
View More Questions