- 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.