Amortisation is defined as:

Amortisation is defined as:

• A. A The systematic allocation of the depreciable amount of an intangible asset over its useful life
• B. B The impairment of asset value
• C. C The recognition of revenue
• D. D The systematic elimination of intangible assets over time

Answer: (A)

Amortisation is about allocating the cost of an intangible asset over the period it provides benefits. It is described as the systematic allocation of the depreciable amount of an intangible asset over its useful life, spreading the expense to reflect how the asset’s economic benefits are consumed each year. The depreciable amount is typically the asset’s cost less any residual value, and this allocation occurs only if the asset has a finite useful life. The process is a non‑cash expense that reduces the asset’s carrying amount on the balance sheet and affects profit over time. If an intangible asset has an indefinite life, it isn’t amortised and is instead tested for impairment. Impairment, revenue recognition, and other concepts do not describe the ongoing allocation of cost over time.

Amortisation is about allocating the cost of an intangible asset over the period it provides benefits. It is described as the systematic allocation of the depreciable amount of an intangible asset over its useful life, spreading the expense to reflect how the asset’s economic benefits are consumed each year. The depreciable amount is typically the asset’s cost less any residual value, and this allocation occurs only if the asset has a finite useful life. The process is a non‑cash expense that reduces the asset’s carrying amount on the balance sheet and affects profit over time. If an intangible asset has an indefinite life, it isn’t amortised and is instead tested for impairment. Impairment, revenue recognition, and other concepts do not describe the ongoing allocation of cost over time.