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Electro Rent Corp (NAS:ELRC)
Depreciation, Depletion and Amortization
$57.9 Mil (TTM As of Feb. 2016)

Electro Rent Corp's depreciation, depletion and amortization for the three months ended in Feb. 2016 was $14.0 Mil. Its depreciation, depletion and amortization for the trailing twelve months (TTM) ended in Feb. 2016 was $57.9 Mil.


Definition

Depreciation is a present expense that accounts for the past cost of an asset that is now providing benefits.

Depletion and amortization are synonyms for depreciation.

Generally:
• The term “depreciation” is used when discussing man made tangible assets
• The term “depletion” is used when discussing natural tangible assets
• The term “amortization” is used when discussing intangible assets

Electro Rent Corp Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Feb. 2016 was 14.329 (May. 2015 ) + 14.919 (Aug. 2015 ) + 14.648 (Nov. 2015 ) + 14.049 (Feb. 2016 ) = $57.9 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

One of the key tenets of Generally Accepted Accounting Principles (GAAP) is “the matching principle”. The matching principle states that companies should report associated costs and benefits at the same time.

For example:

If a company buys a $300 million cruise ship in 1982 and then sells tickets to passengers for the next 30 years, the company should not report a $300 million expense in 1982 and then ticket sales for 1982 through 2012. Instead, the company should spread the purchase price of the ship (the cost) over the same time period it sells tickets (the benefit).

To create income statements that meet the matching principle, accountants use an expense called depreciation.

So, instead of reporting a $300 million “purchase” expense in 1982, the company might:

• Report a $30 million “depreciation” expense in 1982, 1983,