What does



0
Is it the same as Amortization or Depreciation or is it a new type of expense at all?

2 Answer(s)


1

Amortization refers to spreading an intangible asset's cost over the asset's life time like patents.
Depreciation refers to prorating a tangible asset's cost over the asset's life time like machinery.

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Companies invest their cash balances in long term securities, bonds etc. Often times these prices fluctuate and the company has to adjust book carrying value of these securities to the market value. If the market value has decreased, then it is called as dimunition in value of long term securities.

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