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Amortization of Intangible Assets Formula

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Amortization Expense refers to the systematic allocation of the cost of intangible assets or the depreciation of tangible assets over their useful lives. Check FAQs

AE = \frac{HCIA - RV}{ULA}

AE - Amortization Expense?HCIA - Historical Cost of Intangible Asset?RV - Residual Value?ULA - Useful Life Assumption?

Amortization of Intangible Assets Example

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Here is how the Amortization of Intangible Assets equation looks like with Values.

Here is how the Amortization of Intangible Assets equation looks like with Units.

Here is how the Amortization of Intangible Assets equation looks like.

100 = \frac{2500 - 1800}{7}

100 = \frac{2500 - 1800}{7}

100 = \frac{2500 - 1800}{7}

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Amortization of Intangible Assets Solution

Follow our step by step solution on how to calculate Amortization of Intangible Assets?

FIRST Step Consider the formula

AE = \frac{HCIA - RV}{ULA}

Next Step Substitute values of Variables

∴

AE = \frac{2500 - 1800}{7}

Next Step Prepare to Evaluate

∴

AE = \frac{2500 - 1800}{7}

LAST Step Evaluate

∴

AE = 100

Amortization of Intangible Assets Formula Elements

Variables

Amortization Expense

Amortization Expense refers to the systematic allocation of the cost of intangible assets or the depreciation of tangible assets over their useful lives.

Symbol: AE

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Amortization Expense

Historical Cost of Intangible Asset

Historical Cost of Intangible Asset refers to the amount paid on the initial date of purchase.

Symbol: HCIA

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Historical Cost of Intangible Asset

Residual Value

Residual Value refers to the estimated value of an asset at the end of its useful life.

Symbol: RV

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Residual Value

Useful Life Assumption

Useful Life Assumption refers to the estimated duration over which an asset is expected to be economically useful to its owner.

Symbol: ULA

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Useful Life Assumption

Other formulas in Asset Management category

Go Net Capital Spending

NCS = ENFA - BNFA + Dep n

Go Residual Income

RI = OI - MRRR \cdot AOA

Go Internal Growth Rate

IGR = RR \cdot ROA

Go Depreciable Cost of Asset

DC = PC - SV

How to Evaluate Amortization of Intangible Assets?

Amortization of Intangible Assets evaluator uses Amortization Expense = (Historical Cost of Intangible Asset-Residual Value)/Useful Life Assumption to evaluate the Amortization Expense, The Amortization of Intangible Assets is refered to the systematic allocation of the cost of intangible assets or the depreciation of tangible assets over their useful lives. Amortization Expense is denoted by AE symbol.

How to evaluate Amortization of Intangible Assets using this online evaluator? To use this online evaluator for Amortization of Intangible Assets, enter Historical Cost of Intangible Asset (HCIA), Residual Value (RV) & Useful Life Assumption (ULA) and hit the calculate button.

FAQs on Amortization of Intangible Assets

What is the formula to find Amortization of Intangible Assets?

The formula of Amortization of Intangible Assets is expressed as Amortization Expense = (Historical Cost of Intangible Asset-Residual Value)/Useful Life Assumption. Here is an example- 100 = (2500-1800)/7.

How to calculate Amortization of Intangible Assets?

With Historical Cost of Intangible Asset (HCIA), Residual Value (RV) & Useful Life Assumption (ULA) we can find Amortization of Intangible Assets using the formula - Amortization Expense = (Historical Cost of Intangible Asset-Residual Value)/Useful Life Assumption.

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Amortization of Intangible Assets Formula

Amortization of Intangible Assets Example

Amortization of Intangible Assets Solution

Amortization of Intangible Assets Formula Elements

Other formulas in Asset Management category

How to Evaluate Amortization of Intangible Assets?

FAQs on Amortization of Intangible Assets

Variable Name