Amortized cost is that accumulated portion of the recorded cost of a fixed asset that has been charged to expense through either depreciation or amortization. Depreciation is used to ratably reduce the cost of a tangible fixed asset, and amortization is used to ratably reduce the cost of an intangible fixed asset.

Where is amortized cost recorded?

Amortization is recorded in the financial statements of an entity as a reduction in the carrying value of the intangible asset in the balance sheet and as an expense in the income statement.

How do you find amortization expense?

Subtract the residual value of the asset from its original value. Divide that number by the asset's lifespan. The result is the amount you can amortize each year.