Understanding Intangible Assets and Amortization Expense

amortization refers to the allocation of the cost of

Loan amortisation is paying off the debt of something over a specified period. At the end of the amortised period, the borrower will own the asset outright. The formulas for depreciation and amortization are different because of the use of salvage value. The amortization base of an intangible asset is not reduced by the salvage value.

He is the owner of St. Louis Test Preparation (), where he provides online tutoring in accounting and finance to both graduate and undergraduate students. Explanations may also be supplied in the footnotes, particularly if there is a large swing in the depreciation, depletion, and amortization (DD&A) charge from one period to the next. Analysts and investors in the energy sector should be aware of this expense and how it relates to cash flow and capital expenditure.

How Amortization helps business?

Goodwill amortization is when the cost of the goodwill of the company is expensed over a specific period. Amortization is usually conducted on a straight-line basis over a 10-year period, as directed by the accounting standards. There are several steps to follow when calculating amortization for intangible assets.

Some assets subject to amortized Cost include bonds held until maturity, loans receivable, intangible assets like patents or copyrights, and certain long-term investments. In conclusion, understanding the concept of amortized Cost is crucial in various financial aspects. It allows businesses to accurately account for assets and liabilities over time, ensuring transparency and compliance with accounting standards. Organizations can effectively manage their investments and optimize returns by calculating premium amortization for bonds sold before maturity. The cost of the patent is $100,000, and its estimated useful life is ten years. Using straight-line amortization, the annual amortization expense would be $10,000 ($100,000 divided by 10 years).

Amortization vs. depreciation: what’s the difference?

According to FASB’s accounting standards codification, companies are required to identify and measure the premium, discount and acquisition costs related to a loan. This amount is then to be amortized over the period of the loan’s lifespan. Assume a company purchased a patent, an intangible asset, worth $100,000 with a useful life of 10 years.

For instance, if a company purchases a copyright for $50,000 with an expected useful life of 10 years, the annual amortization expense would be $5,000. This amortization expense has a notable impact on the company’s financial statements. On the income statement, it serves as an operating expense, reducing the reported net income for the period. First, a debit to the amortisation expense is entered, then a corresponding credit to the intangible asset account is entered. In accounting, amortization is a method of obtaining the expenses incurred by an intangible asset arising from a decline in value as a result of use or the passage of time. Amortisation is the acquisition cost minus the residual value of an asset, calculated in a systematic manner over an asset’s useful economic life.

Amortization – Introduction

Methodologies for allocating amortization to each accounting period are generally the same as these for depreciation. For example, a company benefits from the use of a long-term asset over a number of years. amortization refers to the allocation of the cost of Thus, it writes off the expense incrementally over the useful life of that asset. First, amortization is used in the process of paying off debt through regular principal and interest payments over time.

By allocating these costs over time, businesses can better align their expenses with the revenues generated by these assets. This helps provide a more accurate financial performance representation during each accounting period. Amortization plays a vital role in the financial management of manufacturing companies. It allows businesses to allocate and track expenses related to intangible assets, optimizing their financial strategies. In this article, we will delve into the concept of Amortization, it’s types, benefits, and its significance in the manufacturing industry.

Posted: July 27, 2020 5:34 pm


According to Agung Rai

“The concept of taksu is important to the Balinese, in fact to any artist. I do not think one can simply plan to paint a beautiful painting, a perfect painting.”

The issue of taksu is also one of honesty, for the artist and the viewer. An artist will follow his heart or instinct, and will not care what other people think. A painting that has a magic does not need to be elaborated upon, the painting alone speaks.

A work of art that is difficult to describe in words has to be seen with the eyes and a heart that is open and not influenced by the name of the painter. In this honesty, there is a purity in the connection between the viewer and the viewed.

As a through discussion of Balinese and Indonesian arts is beyond the scope of this catalogue, the reader is referred to the books listed in the bibliography. The following descriptions of painters styles are intended as a brief introduction to the paintings in the catalogue, which were selected using several criteria. Each is what Agung Rai considers to be an exceptional work by a particular artist, is a singular example of a given period, school or style, and contributes to a broader understanding of the development of Balinese and Indonesian paintng. The Pita Maha artist society was established in 1936 by Cokorda Gde Agung Sukawati, a royal patron of the arts in Ubud, and two European artists, the Dutch painter Rudolf Bonnet, and Walter Spies, a German. The society’s stated purpose was to support artists and craftsmen work in various media and style, who were encouraged to experiment with Western materials and theories of anatomy, and perspective.
The society sought to ensure high quality works from its members, and exhibitions of the finest works were held in Indonesia and abroad. The society ceased to be active after the onset of World War II. Paintings by several Pita Maha members are included in the catalogue, among them; Ida Bagus Made noted especially for his paintings of Balinese religious and mystical themes; and Anak Agung Gde Raka Turas, whose underwater seascapes have been an inspiration for many younger painters.

Painters from the village of Batuan, south of Ubud, have been known since the 1930s for their dense, immensely detailed paintings of Balinese ceremonies, daily life, and increasingly, “modern” Bali. In the past the artists used tempera paints; since the introduction of Western artists materials, watercolors and acrylics have become popular. The paintings are produced by applying many thin layers of paint to a shaded ink drawing. The palette tends to be dark, and the composition crowded, with innumerable details and a somewhat flattened perspective. Batuan painters represented in the catalogue are Ida Bagus Widja, whose paintings of Balinese scenes encompass the sacred as well as the mundane; and I Wayan Bendi whose paintings of the collision of Balinese and Western cultures abound in entertaining, sharply observed vignettes.

In the early 1960s,Arie Smit, a Dutch-born painter, began inviting he children of Penestanan, Ubud, to come and experiment with bright oil paints in his Ubud studio. The eventually developed the Young Artists style, distinguished by the used of brilliant colors, a graphic quality in which shadow and perspective play little part, and focus on scenes and activities from every day life in Bali. I Ketut Tagen is the only Young Artist in the catalogue; he explores new ways of rendering scenes of Balinese life while remaining grounded in the Young Artists strong sense of color and design.

The painters called “academic artists” from Bali and other parts of Indonesia are, in fact, a diverse group almost all of whom share the experience of having received training at Indonesian or foreign institutes of fine arts. A number of artists who come of age before Indonesian independence was declared in 1945 never had formal instruction at art academies, but studied painting on their own. Many of them eventually become instructors at Indonesian institutions. A number of younger academic artists in the catalogue studied with the older painters whose work appears here as well. In Bali the role of the art academy is relatively minor, while in Java academic paintings is more highly developed than any indigenous or traditional styles. The academic painters have mastered Western techniques, and have studied the different modern art movements in the West; their works is often influenced by surrealism, pointillism, cubism, or abstract expressionism. Painters in Indonesia are trying to establish a clear nation of what “modern Indonesian art” is, and turn to Indonesian cultural themes for subject matter. The range of styles is extensive Among the artists are Affandi, a West Javanese whose expressionistic renderings of Balinese scenes are internationally known; Dullah, a Central Javanese recognized for his realist paintings; Nyoman Gunarsa, a Balinese who creates distinctively Balinese expressionist paintings with traditional shadow puppet motifs; Made Wianta, whose abstract pointillism sets him apart from other Indonesian painters.

Since the late 1920s, Bali has attracted Western artists as short and long term residents. Most were formally trained at European academies, and their paintings reflect many Western artistic traditions. Some of these artists have played instrumental roles in the development of Balinese painting over the years, through their support and encouragement of local artist. The contributions of Rudolf Bonnet and Arie Smit have already been mentioned. Among other European artists whose particular visions of Bali continue to be admired are Willem Gerrad Hofker, whose paintings of Balinese in traditional dress are skillfully rendered studies of drapery, light and shadow; Carel Lodewijk Dake, Jr., whose moody paintings of temples capture the atmosphere of Balinese sacred spaces; and Adrien Jean Le Mayeur, known for his languid portraits of Balinese women.

Agung Rai feels that

Art is very private matter. It depends on what is displayed, and the spiritual connection between the work and the person looking at it. People have their own opinions, they may or may not agree with my perceptions.

He would like to encourage visitors to learn about Balinese and Indonesian art, ant to allow themselves to establish the “purity in the connection” that he describes. He hopes that his collection will de considered a resource to be actively studied, rather than simply passively appreciated, and that it will be enjoyed by artists, scholars, visitors, students, and schoolchildren from Indonesia as well as from abroad.

Abby C. Ruddick, Phd
“SELECTED PAINTINGS FROM THE COLLECTION OF THE AGUNG RAI FINE ART GALLERY”


VIEW THE PROFILE

OUR PARTNERS