As a general rule of thumb, you amortize or capitalize the cost over the years that you expect to receive benefits from holding the asset, and you expense an asset if it benefits your firm over a shorter time period.

When should you start amortizing?

Amortization Methods

The amortization of an asset should only start when the asset is brought into actual use, and not before, even if the requisite intangible asset has been acquired. 2. The level amortization should be appropriate so that the book value of an asset is not under or overstated.

What expenses should be amortized?

Amortization expenses account for the cost of long-term assets (like computers and vehicles) over the lifetime of their use. Also called depreciation expenses, they appear on a company's income statement.