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What is Amortization expense?

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∙ 7y ago

Updated: 10/16/2024

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Q: What is Amortization expense?

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Continue Learning about Accounting

Does amortization have a cash expense?

No amortization is done for intangible assets like depreciation for tangible assets and it also does not involve cash expense.

The periodic transfer of the cost of an intangible asset to expense?

amortization

Is the straight-line amortization or effective interest rate method better?

This method is preferred over the straight-line method of amortizing bond discount or bond premium. Amortization of a bond discount or premium is the difference between the interest expense and the nominal interest payment. The amortization entry is: Interest Expense (effective interest rate x carrying value) Cash (nominal interest rate x face value) Bond Discount (for the difference)

What is amortization of goodwill?

Amortization is the process of writing off intangible assets such as goodwill,patents, trademarks, license etc. The portion of goodwill(or any other intangible asset) to be amortized in a particular accounting year is treated as revenue expense and is charged to the Profit and Loss Account of that year.

How can an amortization chart be produced?

An amortization chart is created from an amortization table or amortization schedule to show visually how the balance, cumulative interest, and principal change over the time.

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Related Questions

Does amortization have a cash expense?

No amortization is done for intangible assets like depreciation for tangible assets and it also does not involve cash expense.

Is amortisation of goodwill a disallowable expense?

i don't no, but amortization of lease is disallowable expense

The periodic transfer of the cost of an intangible asset to expense?

amortization

Where does amortization expense go on trial balance?

on the credit side

What is an example of an amortized expense?

The costs of long-lived intangible assets, such as patents, are allocated across time periods and reclassified as amortization expense.

How does amortization of the principal balance affect the amount of interest expense recorded each succeeding year?

reduces the amount of interest expense each succeeding year

Is the straight-line amortization or effective interest rate method better?

This method is preferred over the straight-line method of amortizing bond discount or bond premium. Amortization of a bond discount or premium is the difference between the interest expense and the nominal interest payment. The amortization entry is: Interest Expense (effective interest rate x carrying value) Cash (nominal interest rate x face value) Bond Discount (for the difference)

What is amortization of goodwill?

Amortization is the process of writing off intangible assets such as goodwill,patents, trademarks, license etc. The portion of goodwill(or any other intangible asset) to be amortized in a particular accounting year is treated as revenue expense and is charged to the Profit and Loss Account of that year.

What is principal amortization?

It is the amortization of the principal of the loan.

EBITDA is 7.5 million and net income is 1.8 million interest expense 2 million and corporate tax 40 what is the charge for depreciation and amortization?

D&A = 2.5 million

How can an amortization chart be produced?

An amortization chart is created from an amortization table or amortization schedule to show visually how the balance, cumulative interest, and principal change over the time.

Lessee books short workings recoverable in future years?

Books such as "Depreciation and Amortization" or "Capital Expenditure Accounting" would cover the topic of how to account for and recover the cost of assets over time, including through methods like depreciation or amortization. These books provide guidance on recording asset values, calculating depreciation or amortization expenses, and understanding how these processes impact financial statements and tax liabilities.

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