While amortisation is used to spread the cost of intangible assets such as patents, trademarks, and copyrights, depreciation is used to spread the cost of a tangible asset. Physical assets include computers, vehicles, machinery, and office furniture.

In contrast to depreciation, amortisation is frequently paid in consistent instalments, which means that the same amount is repaid each month or year until the debt is paid off. Borrowers will often repay more at the beginning of the borrowing period in order to pay less at the end. This is because the inherent value of a tangible asset may decrease over time, which means it will be worth less as it ages or is used more.