Investment Content: What is amortization?

Jul 26, 2023

2 min read

Investment Content: What is amortization?

Amortization is a type of expense in accounting that has deductions from depreciation of goods, which are expenses calculated for showing actual costs and expenses. that is in the period of use of the property Comparison of amortization And the depreciation can be seen from the use of the property. The tangible assets will be used. depreciation As for the intangible property, it will be used. amortization, such as copyright, and so the amortization Or depreciation is distributed in the form of costs or expenses in each cycle of the account as follows:

- Using the straight line method or the Straight Line Method

It is the calculation of the depreciation from the total depreciation divided by the useful life.

- Using the Sum of Year Digit Method

- It is the calculation of the depreciation from 1 to the useful life to be added to find the sum, then take the depreciation in the largest unit divided by the sum.

- The use of calculation methods based on activity levels or Activity -based Method

It is to determine the selection value from the total activity level reference of the product that is likely to be utilized.

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