How is depreciation and amortization typically shown on the income statement?

Depreciation and amortization are typically categorized as an expense on the income statement. This is because they represent the allocation of the cost associated with tangible and intangible assets, respectively, over their useful lives. By recording these items as expenses, companies reflect the consumption of their assets during the accounting period, which reduces the taxable income.

This treatment aligns with the matching principle in accounting, where expenses are matched with the revenues they help to generate within the same period. This provides a clearer picture of a company's financial performance and profitability. Consequently, portraying depreciation and amortization as expenses contributes significantly to assessing a firm's financial health.