Investing term

What is Depreciation & amortization (D&A)?

Non-cash accounting charge that spreads the cost of long-lived assets over their useful life.

Depreciation and amortization (D&A) is a non-cash accounting charge that spreads the cost of a long-lived asset across the years it's used, rather than expensing it all at once. It lowers reported profit without any cash actually leaving in that period, which is why it's added back when calculating cash flow and metrics like EBITDA.

For example

A company buys a $10M machine expected to last 10 years and records $1M of depreciation annually — a paper expense, but no cash goes out each year.

Depreciation & amortization (D&A) is taught hands-on in Stage 14 — Reading Financial Statements.

See the lesson →

Related terms

Accounts receivable (A/R)Money customers owe the company for goods or services already delivered but not yet paid.AccrualsAccounting entries that record revenue or expense before cash actually moves.Annual reportThe yearly disclosure that includes audited financials, MD&A, and footnotes — the primary source for serious investors.Balance sheetThe 'photo' statement — what the company owns, what it owes, and what's left for owners, on a single date.
← Back to the full glossary