<p>In <a href="https://www.goforma.com/small-business-accounting/31-accounting-terms-concepts-you-need-to-know" target="_blank">business accounting</a>, amortisation is a method of calculating the value of a business asset over time. It is the process of spreading out the cost of an asset over its useful life.<br></p><p>In relation to loans, amortisation refers to the spreading out of loans into a series of fixed monthly installments.</p>
Small Business Accountants
What is Amortisation?
Amortisation is the accounting process of spreading the cost of an intangible asset, such as software, patents, or goodwill, over its useful economic life. It works like depreciation does for tangible assets but applies to non-physical resources. Under UK GAAP (FRS 102), goodwill and other intangibles acquired after 1 April 2002 can also be deductible for corporation tax under the Corporate Intangibles Regime, subject to specific conditions.
