amortizatsiya

Amortizatsiya is the systematic allocation of the cost of a long-term asset over its estimated useful life. In accounting practice, it covers depreciation of tangible fixed assets and amortization of intangible assets, depending on the asset type and local rules. The purpose is to match the expense with the periods that benefit from the asset’s use and to present a fair view of profitability and asset values.

Assets eligible for amortizatsiya include tangible assets such as buildings and machinery, as well as intangible assets such as software, patents, licenses, and customer lists. Distinctions exist between depreciation of tangible assets and amortization of finite-life intangible assets; indefinite-life intangible assets are not amortized but may be tested for impairment. The estimates of useful life and residual value influence the amount recognized each period.

Methods used to calculate amortizatsiya include straight-line (equal amounts each period), accelerated methods such as declining balance, and units-of-production based on asset usage. Straight-line amortizatsiya, for example, distributes the depreciable cost evenly over the asset’s useful life: annual amortizatsiya = (cost − residual value) / useful life. Estimates are reviewed regularly and revised if expectations change.

Accounting and tax treatment vary by jurisdiction. Amortizatsiya reduces the asset’s carrying amount and is recorded as an expense in the income statement, with a corresponding contra-asset account (accumulated amortization). Tax regimes may allow depreciation or amortization deductions that differ from accounting amounts, creating temporary timing differences and potential deferred tax considerations.

Example: A software license purchased for 100,000 with a 5-year useful life and no residual value is amortized straight-line at 20,000 per year.