Amortisation
Also called: amortization
The cost of an intangible asset, such as software, a licence or a patent, spread over the years it is expected to be used.
Amortisation works like depreciation, but for assets without physical form. Some intangible assets, such as goodwill under Ind AS, are not amortised and are instead tested each year for impairment.
Example
A ₹100 crore licence that lasts 20 years is amortised by ₹5 crore a year.
Learn more in these lessons
- Depreciation, amortisation and capital expenditureWhat are depreciation and amortisation?
Related terms
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