To depreciate long-term tangible asset or amortize an intangible asset means to determine a corresponding useful life during which it will be used, according to its technical and technological specifications, to generate economic effects within the scope of the company’s activity and to acknowledge its transferred value on the impacted effects through the periods. The asset’s value is reduced, as part of the assets of the company, in the amount in which the asset itself is incorporated in the outputs. Depreciation/amortization is determined for business purposes based on the way of using and on the effectiveness of the asset, based on the company’s needs for assets and its possible replacement with technically more perfect equipment. New and technologically more advanced assets bring more productivity, better product quality, and lower labor costs, lower costs of maintenance and repairs which are not amortized. For this purpose, the company’s management through accounting policies chooses a method of amortization/depreciation and depreciation/amortization rate calculation, with which the depreciated/amortized amounts are transferred through the periods on the effects and are allocated among them. Allocation can be performed in equal amounts, with bigger amounts at the beginning of the period of use of the asset and the smallest at the end, or vice versa, or in relation to the amount of predicted and realized effects. The effect of depreciation/amortization on the business result and the values of the asset is direct and, proportionally to the amount of capitally intensive production, also significant. Therefore, depreciation and amortization, from the determination of the value of purchase (expense) of the asset, through the determination of possible calculation methods, to the termination of recognition, are regulated by International financial reporting standards, and by Croatian financial reporting standards. Because of their direct effect on the amount of business result (profit), the Profit tax law determines the assets which can(not) be amortized/depreciated, the fiscally accepted calculation method and the yearly depreciation/amortization rates based on the depreciation/amortization period for certain types of long-term assets.