Accumulated amortization is used to amortize intangible assets. The balance is generally on the credit side, and the credit side registers the accumulated amortization that has been provided. Similar to the accumulated depreciation account in fixed assets.
The accumulated amortization account is an asset account and is used to calculate the amortization of intangible assets. Listed under assets on the balance sheet as a deduction from intangible assets. Accumulated amortization only belongs to the adjustment account of intangible assets, and the registration direction is opposite to that of intangible assets.
Accumulated amortization is similar to the accumulated depreciation account in fixed assets. It is used to amortize intangible assets. The balance is generally on the credit side, and the credit side registers the accumulated amortization that has been provided.
Just like fixed assets need to be separately accounted for accumulated depreciation, the new system adds a new first-level account "accumulated amortization" for intangible assets.
1. This account accounts for the accumulated amortization provided by the enterprise for intangible assets with limited service life.
2. This account should be calculated in detail according to intangible assets items.
3. The enterprise amortizes intangible assets on a monthly basis, debits "administrative expenses", "other business expenses" and other accounts, and credits this account.
4. The ending credit balance of this account reflects the accumulated amortization of the enterprise’s intangible assets.
Extended information:
Accumulated amortization accounting method of intangible assets
Amortization of intangible assets is a method of amortizing the original price of intangible assets within its effective period. . The amortization of intangible assets generally adopts the straight-line method. When amortizing, it is directly included in the debit of the "intangible assets" account, and there is no need to set up another amortization account.
The balance of the original price of the intangible assets minus the intangible assets is the accumulated amortization amount of the intangible assets. In order to provide relevant data on the amortization of the company's intangible assets, the company must indicate the original price of each intangible asset when replacing old accounts.
The enterprise accrues the amortization of intangible assets on a regular basis (monthly), debits "administrative expenses", "other business costs" and other accounts, and credits the "accumulated amortization" account. The disposal of intangible assets should also carry forward accumulated amortization at the same time.
Example: Enterprise A purchased a patent right in June 2007. Its recorded value is 360,000 yuan, its effective useful life is 10 years, and it is amortized on a straight-line basis:
According to Calculate the monthly amortization amount during the validity period of the patent right:
Annual amortization amount = total price of purchasing the patent right ÷ effective service life = 360000 ÷ 10 = 36000 (yuan/year)
Monthly amortization = 36000÷12=3000 (yuan/month)
When amortizing each month, the accounting treatment is:
Debit: management expenses
Credit: Accumulated amortization
Baidu Encyclopedia-Accumulated amortization