Straight-Line Amortization
Definition: Straight-line amortization allocates the cost of an intangible asset evenly over its useful life. The annual amortization expense equals (Cost − Re…
ModerateModerate
Straight-line amortization allocates the cost of an intangible asset evenly over its useful life. The annual amortization expense equals (Cost − Residual Value) / Useful Life. Intangible assets such as patents, copyrights, trademarks, and franchise rights are amortized rather than depreciated. Unlike tangible assets, many intangible assets have no residual value. Amortization Expense is debited and Accumulated Amortization (or the intangible asset account directly) is credited each period.
Amortization Schedule Calculator
Total Amortizable Cost$120,000.00($120,000.00 − $0.00)
Amortization Per Year$12,000.00per year
Straight-Line Rate10.00%(1 / 10 years)
| Year | Beginning Book Value | Amortization | Accum. Amortization | Ending Book Value |
|---|---|---|---|---|
| 1 | $120,000.00 | $12,000.00 | $12,000.00 | $108,000.00 |
| 2 | $108,000.00 | $12,000.00 | $24,000.00 | $96,000.00 |
| 3 | $96,000.00 | $12,000.00 | $36,000.00 | $84,000.00 |
| 4 | $84,000.00 | $12,000.00 | $48,000.00 | $72,000.00 |
| 5 | $72,000.00 | $12,000.00 | $60,000.00 | $60,000.00 |
| 6 | $60,000.00 | $12,000.00 | $72,000.00 | $48,000.00 |
| 7 | $48,000.00 | $12,000.00 | $84,000.00 | $36,000.00 |
| 8 | $36,000.00 | $12,000.00 | $96,000.00 | $24,000.00 |
| 9 | $24,000.00 | $12,000.00 | $108,000.00 | $12,000.00 |
| 10 | $12,000.00 | $12,000.00 | $120,000.00 | $0.00 |
DurationLong-Term