What are the differences among valuation, depreciation, amortization, and depletion? Illustrate with some specific examples.

Is it appropriate to calculate depreciation using two different methods? Why?

Depletion consists of two categories; cost depletion and percentage depletion, and allows a owner to account for a reduction of a producers reserves. Depreciation is the decline in the value of assets and allocation of the cost of assets for the period they are used. It affects the value of business, entities and net income. Some methods used to compute depreciation are straight line, fixed percentage, and decline balance. Amortization is the process of decreasing an amount over a period. An amortization table is used to show the ratio of principal and interest that shows how the principal decreases over time. Depreciation is used for tangible items while amortization is used for intangible assets. Depletion is a reduction in a producer`s reserves while depreciation is a reduction in the value of assets. It is not necessary to calculate depreciation using two different methods because the double declining method is an accelerated rate of depreciation while the straight line method is more simplistic at half the rate.