Amortisation
Definition
The gradual write-off of an intangible asset's cost over its useful life. Unlike depreciation (which applies to physical assets), amortisation spreads the expense of assets such as patents, software, and licences across the income statement over the period they generate value.
Related Terms
Related FAQ
Can you capitalise intangible assets on the balance sheet?
Yes, under IAS 38 and ASC 350, intangible assets can be capitalised when they meet specific recognition criteria — but internally generated goodwill and many R&D costs must be expensed.
Read full answer →What is the tax treatment of intangible assets and amortisation?
Under UK tax law, amortisation of certain intangible assets is tax-deductible; goodwill is not. Acquired intangibles (IP, customer contracts) typically qualify; internally developed intangibles must meet strict criteria.
Read full answer →What is the difference between tangible and intangible assets?
Tangible assets are physical items like machinery, property, and inventory. Intangible assets are non-physical items like patents, brands, software, and customer relationships that often represent the majority of a company's value.
Read full answer →Put this knowledge to work
Use Opagio's free tools to measure and grow the intangible assets that drive your business value.