Total depreciation and amortization refers to the total amount of depreciation and amortization expenses recorded by a company over a given period of time, typically a fiscal year. Depreciation and amortization are both non-cash expenses that reduce the value of long-term assets and intangible assets, respectively, on a company's balance sheet.
Depreciation is the process of allocating the cost of a tangible long-term asset, such as a building or a piece of equipment, over its useful life. Depreciation expense is typically recorded annually, and the total depreciation expense over the useful life of the asset is deducted from the asset's original cost to determine its net book value.
Amortization is the process of allocating the cost of an intangible asset, such as a patent or a trademark, over its useful life. Amortization expense is also typically recorded annually, and the total amortization expense over the useful life of the asset is deducted from the asset's original cost to determine its net book value.
The total depreciation and amortization expense is an important metric for investors and analysts, as it provides insight into the company's capital expenditures and the value of its long-term assets. Additionally, depreciation and amortization expenses are tax-deductible, which can have an impact on a company's net income and tax liability.