What is amortization?
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Answer Posted / anantaditya aima
there is one thing as books which is shown to shareholders
and the other thing is income-tax document shown to the IT
authorities for tax payments on income. Through amortization
we can show more book profits by showing less expense for a
certain intangible asset having high monetory value and in
IT doc we can show the full expense. This would only avoid
showing less profits to public so dat they keep up their
trust on the firm. It is different from depreciation as it
is not a tax planning instrument and is valid to a certain
intangible assets only like :- Product development
expense,R&D exp,copyright fee etc all specified under law.
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