What is amortization?
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Answer Posted / v.hemant kumar
Amortization is the pratice of writtening off the capital
expense especially the expense on intangible assets such as
copyrights, patents, goodwill( that is purchased)etc, over
a particular period of time. It should not be confused with
depreciation as depreciation is with regard to tangible
assets only. However it should be understood that this is a
book entry only & does not involve any cash outflow.It is
mainly done for income tax reduction pratice only
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