Hi Ruotian, the depreciation part relates to tangible assets, things you can touch, purchased by the company. As a rough example:
If WHC buy a Tonka truck from kmart for $10 they then give a service life to the truck, say 5 years, as the first year passes $2 of the truck's value is lost to depreciation. Eventually, after 5 years, all the money in the Tonka truck is gone and WHC go and buy the same or similar truck again. Depreciation is just good practice in any budget and all tangible assets, worth a certain value and over, contribute to it. Once depreciation has been obtained anyone can apply it as a cost to an activity. As you have posted.
Amortisation relates to intangible assets, things you can't touch, like patents, goodwill, licenses, subscriptions.... heaps of other boring things. I personally like Tonka trucks much more.
Both are important numbers in a capital heavy business. Depletion is another important one too this relates to how much resources WHC have left to pull out of the ground.
I hope this helps. Take care and...
To da loo
WHC Price at posting:
$1.28 Sentiment: Buy Disclosure: Held
(20min delay)