Amortization

How to record amortization of intangible assets in Bkper — gradually writing down the balance over the asset's useful life.

Amortization gradually writes down the balance of an intangible asset over its useful life, spreading the cost across the periods that benefit from it.

The accounts

Two accounts handle the process: an accumulated amortization account (liability type) that tracks the total amount written down, and an amortization expense account (outgoing type) that records the periodic cost.

Bkper accounts showing Accumulated amortization (Intangible Asset) and Amortization expense (Intangible asset)

Recording amortization transactions

Each period, record a transaction that moves an amount from the accumulated amortization account to the expense account. In this example, an intangible asset worth 5,000.00 is amortized over five months at 1,000.00 per month:

Date	Amount	From Account		To Account	Description
05/05	1,000.00	Accumulated amortization	>>	Amortization expense	5 x 1000 corresponding to Intangible asset XYZ
04/06	1,000.00	Accumulated amortization	>>	Amortization expense	-
05/07	1,000.00	Accumulated amortization	>>	Amortization expense	-
05/08	1,000.00	Accumulated amortization	>>	Amortization expense	-
06/09	1,000.00	Accumulated amortization	>>	Amortization expense	-

Bkper transaction list showing five monthly amortization entries of 1,000.00 each from Accumulated amortization to Amortization expense

Sample book

Explore a working example: Amortization.