Amortization Definition, Meaning And Explanation
Previously, we studied about “ Depreciation Definition ”, but here we will consider about Amortization Definition, its meaning and brief explanation on it. Amortization Definition It is the systematic allocation of the cost of an Intangible Non Asset over its useful life. Amortization on I n ta n gible No n Current Assets like, Goodwill , Patents, Franchise, etc is the same as in case of Depreciation on Ta n gible No n Current Assets . Amortization Expense is calculated for the year on Intangible Assets to estimate useful life of Assets . Amortization Journal Entry When amortization is charged on Intangible Assets, then following Accounting Journal Entry is Passed in the Book or Journal of Company: Amortization Expense a/c XXX Accumulated Amortization a/c XXX (Amortization on Intangible No n Current Assets is Charged) As