Home Tips. 1  Home Warranty 101 Learn about the difference between home insurance and home warranty, and why you may need both types of coverage. 2  Home Maintenance Top Tips Simple ideas to help you maintain your systems and appliances and keep them running smoothly.
Amortization is recorded in the financial statements of an entity as a reduction in the carrying value of the intangible asset in the balance sheet and as an expense in the income statement.
1 Depreciation is used to ratably reduce the cost of a tangible fixed asset, and amortization is used to ratably reduce the cost of an intangible fixed asset. 2  The amortized cost term can also be applied to the accumulated amount of depletion of a natural resource that has been charged to expense. For example, ABC International has been depreciating a machine in its production area for the last five years. 2  The $48,000 that has been charged to depreciation expense thus far is its amortized cost. 3  As another example, ABC has been amortizing the acquired cost of a patent for several years.