What is the difference between depreciation and amortization?

Depreciation applies to tangible assets (like machinery) to allocate their cost over their useful life due to wear and tear or obsolescence. Amortization applies to intangible assets (like patents or goodwill) to allocate their cost over their useful economic or legal life.

How is depreciation treated when a partner retires?

Depreciation is calculated up to the date of retirement. The asset's book value after depreciation is then considered for revaluation. Any loss or gain on revaluation (including impact of depreciation) is shared among the continuing and retiring partners in their old profit-sharing ratio.

Knowledge Base Foundation Paper 1 Accounting Chapter 5Partnership Accounts

References

Chapter Source Notes
ICAI BOS
ICAI Study Material
MTP References
Previous Year Questions
RTP References

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Depreciation and Amortization in Partnership Accounts: CA Foundation Guide

Kartavvya CA Expert Team

Updated on 7/9/2026

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Depreciation and Amortization in Partnership Accounts: CA Foundation Guide — CA Knowledge Base | Kartavvya