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Was Sind Amortised Cost?

Chloe Bennett • • 6 min read
Was Sind Amortised Cost?

Cost and amortized cost accounting
Cost accounting assumes that a money market instrument purchased upon issuance and held until maturity should be priced at cost. Amortized cost accounting assumes that a money market instrument, acquired after issuance and held until maturity, should be priced at its acquisition cost.

What's Amortised cost?

IAS 39 currently defines amortised cost as "the amount at which the financial asset or financial liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initial amount and the maturity amount and ...

How do you calculate amortized cost?

Calculating Amortization

You divide the initial cost of the intangible asset by the estimated useful life of the intangible asset. For example, if it costs $10,000 to acquire a patent and it has an estimated useful life of 10 years, the amortized amount per year equals $1,000.

Chloe Bennett
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Chloe Bennett

Chloe Bennett explores the intersection of pop culture, streaming entertainment, digital trends, and contemporary lifestyle. Her weekly commentary reaches thousands of culture enthusiasts.