Crash Course in Accounting and Financial Statement Analysis, Second Edition

Summary

Amortization is a systematic expensing of costs of acquired intangible assets. Amortization is a noncash expense. It is conceptually equivalent to depreciation and is often lumped together in one line on the cash flow statement.

Intangibles: What Is Amortizable? Internally developed intangibles: Value cannot be accurately assigned; they cannot be amortized. Acquired intangible assets: Value assigned as part of the transaction; amortization possible. Goodwill: Amortization abandoned after 2001 (see the following section).