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How to Calculate Amortization and Depreciation on an Income Statement

By Motley Fool Staff – Updated Apr 29, 2025 at 11:52PM

Key Points

  • Depreciation spreads the cost of tangible assets over their useful life on income statements.
  • Each year, $1,500 is recorded as a depreciation expense, reducing the asset's book value.
  • Amortization and depreciation represent real economic costs of asset decline, despite being non-cash.

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