• Depreciation of intangible assets is the process by which the cost of such an asset is gradually written off as an expense or written off over time.

  • Depreciation is applied to intangible (non-physical) assets, and depreciation is applied to tangible (physical) assets.
  • Intangible assets may include various types of intellectual property - patents, goodwill, trademarks, etc.
  • Most intangible assets must be amortized over a 15 year period for tax purposes.
  • For accounting purposes, there are six depreciation methods: straight-line, diminishing balance, annuity, bullet, balloon, and negative depreciation.