Amortization Calculation Worksheet — Complete User Guide — Two Accounts Web

Comprehensive guide for the Amortization Calculation Worksheet report — enabling, creating, reading, validating, and posting amortization adjustments through it

Table of Contents

1. What Is the Amortization Calculation Worksheet?
2. Prerequisites — Enabling via the Customize Menu
3. Navigating to the Report
4. The Report List
5. Creating a Worksheet — Field-by-Field
6. Report Output Columns
7. How the Worksheet Calculates Amortization
   • 7.1 Which Assets Are Included
   • 7.2 Net Book Value
   • 7.3 The 365-Day Convention
   • 7.4 Days in the Period and Disposal Proration
   • 7.5 The Calculation and Zero Guard
8. The "New Amortization Entry" Action and GL Posting
9. Related Settings and Configuration
10. Sample Data and Report Output
    • 10.1 Sample Setup
    • 10.2 Report Output
    • 10.3 Calculation Verification
    • 10.4 Resulting Amortization Entry
11. Reporting and Accounting Impact
12. Accounting Regulation Validation
13. Common Notes and Best Practices

1. What Is the Amortization Calculation Worksheet?

The Amortization Calculation Worksheet is a working report for intangible assets with finite useful lives. For a date range that you choose, it:

• Calculates the correct amortization charge for every active intangible asset using its net book value at the period start, its configured annual amortization rate, and the number of days in the period (on a 365-day-year basis);
• Displays the book value, rate, day count, and calculated amortization for each asset, with a total; and
• Offers a one-click New Amortization Entry that books exactly the calculated amounts, so the recorded amortization matches the systematic calculation.

2. Prerequisites — Enabling via the Customize Menu

The report appears under Reports only when the Intangible Assets area is enabled for the business. Intangible Assets is not shown by default in a brand-new company.

How to Enable

1. Open the Customize Menu from the navigation bar (the hamburger / menu icon).
2. Turn on the Intangible Assets tab. (This also enables the Intangible Asset list and the Amortization Entries tab that this report relies on.)
3. Once enabled, the report is available under Reports → Intangible Assets → Amortization Calculation Worksheet.

3. Navigating to the Report

From the main navigation bar:

1. Open Reports.
2. Go to the Intangible Assets category.
3. Click Amortization Calculation Worksheet.

This opens the report list — every worksheet you have created (and saved) for the business appears here, sorted by its From Date.

4. The Report List

The list shows one row per saved worksheet, with three columns:

Each row is clickable:

• Click the row to open the worksheet output (the calculated amortization).
• Edit opens the worksheet form to change the dates or description.

A New Report button at the top creates a fresh worksheet.

5. Creating a Worksheet — Field-by-Field

Click New Report to open the worksheet form. It contains three fields:

1. Enter a From Date and a To Date (the period must be a valid range).
2. Optionally enter a Description.
3. Click Save.
4. The report opens showing the worksheet output for that period.

6. Report Output Columns

The worksheet output opens with a subtitle:

For the period from {From Date} to {To Date}

One row is shown per included intangible asset (ordered by asset code/name), followed by a Total row. Four columns are displayed:

7. How the Worksheet Calculates Amortization

7.1 Which Assets Are Included

Every intangible asset in the business is considered, and included unless it was disposed of before the period's From Date. An asset disposed during the period is included, but only for the days up to its disposal date.

7.2 Net Book Value

The book value used in the calculation is the net book value at the start of the period:

Net Book Value = Total cost recorded for the asset (including opening-balance cost
                 and any cost recorded up to the period end)
                 + Accumulated Amortization carried in
                   (amortization recorded before the period start or via opening balance,
                    which is a credit and therefore negative)

In practice: Net Book Value = Cost − Accumulated Amortization carried in. Amortization already booked within the period is not subtracted again — the period's own charge is what the worksheet is calculating.

7.3 The 365-Day Convention

The annual amortization is prorated by the actual number of days in the period against a 365-day year. This differs from the fixed-asset depreciation worksheet (360-day convention) — amortization uses a calendar-day basis.

Days in period = (To Date − From Date) in days + 1   (both dates inclusive)

7.4 Days in the Period and Disposal Proration

The full period day count applies to every included asset. If an asset was disposed during the period (disposal date before the To Date), the days after the disposal date are removed from its day count:

Amortization days = Full period days − (To Date − Disposal Date) in days

This means a mid-period disposal is amortized only up to its disposal date (IAS 38 — amortization ceases on derecognition).

7.5 The Calculation and Zero Guard

Amortization = Net Book Value × Annual Rate % × (Amortization Days / 365)

The result is rounded to the base currency's decimal places. If the calculated amount is negative, it is set to zero. A zero result (or a 0% rate) means the asset is omitted from the report and from the suggested entry.

8. The "New Amortization Entry" Action and GL Posting

8.1 The "New Amortization Entry" Action

The worksheet has a New Amortization Entry button. Clicking it opens the Amortization Entry form pre-populated from the worksheet:

• Date = the worksheet's To Date.
• Description = "For the period from {From Date} to {To Date}".
• One line per asset with a positive calculated amortization, where the line amount equals that asset's calculated amortization.

You review the lines and click Save to post the amortization. (A reference number is generated automatically.)

8.2 GL Posting of the Created Entry

Each line of the Amortization Entry posts two General Ledger transactions in the base currency:

Dr  Intangible Assets Amortization (P&L — Expense)      Amount
Cr  Accumulated Amortization (BS — Contra-Asset)        Amount
                                                          Sum: 0 ✓

Expense account resolution:

• If the asset has a Custom Amortization Expense Account, that account is debited;
• Otherwise the system's default intangible-asset amortization expense account is used.

Credit account: the Accumulated Amortization balance-sheet account. The debit and credit are equal, so every line (and the whole entry) balances.

9. Related Settings and Configuration

10. Sample Data and Report Output

For the first half of FY2026: 1-Jan-2026 to 30-Jun-2026.

10.1 Sample Setup

10.2 Report Output

For the period from 1-Jan-2026 to 30-Jun-2026

10.3 Calculation Verification

IA-001 — Patent XYZ:

Net book value   = 100,000 − 6,000 = 94,000
Days in period   = 181 (1-Jan to 30-Jun, inclusive)
Amortization     = 94,000 × 20% × (181 / 365)
                 = 94,000 × 0.20 × 0.49589 = 9,322.74  ✓

IA-002 — Trademark ABC:

Net book value   = 50,000 − 2,500 = 47,500
Amortization     = 47,500 × 10% × (181 / 365)
                 = 47,500 × 0.10 × 0.49589 = 2,355.48  ✓

IA-003 — Software License:

Net book value   = 30,000 − 0 = 30,000
Amortization     = 30,000 × 33% × (181 / 365)
                 = 30,000 × 0.33 × 0.49589 = 4,909.32  ✓

IA-004 — Customer Database (disposed 30-Apr-2026):

Net book value   = 20,000
Full period days = 181
Days after disposal = 30-Jun to 30-Apr = 61
Amortization days   = 181 − 61 = 120
Amortization     = 20,000 × 20% × (120 / 365)
                 = 20,000 × 0.20 × 0.32877 = 1,315.07  ✓

Total verification:

Book value  = 94,000 + 47,500 + 30,000 + 20,000 = 191,500  ✓
Amortization = 9,322.74 + 2,355.48 + 4,909.32 + 1,315.07 = 17,902.61  ✓

10.4 Resulting Amortization Entry

Clicking New Amortization Entry opens an Amortization Entry dated 30-Jun-2026 with one line per positive asset:

On save, the system posts (in BDT):

Dr  Intangible Assets Amortization                       17,902.61
    Cr  Accumulated Amortization — Patent XYZ              9,322.74
    Cr  Accumulated Amortization — Trademark ABC           2,355.48
    Cr  Accumulated Amortization — Software License        4,909.32
    Cr  Accumulated Amortization — Customer Database       1,315.07
                                                  Total   17,902.61  ✓ DR = CR

11. Reporting and Accounting Impact

The worksheet itself posts nothing — it only proposes an Amortization Entry. The accounting impact comes from saving that entry:

• Profit & Loss (Amortization Expense): The debit increases the period's amortization expense, reducing net profit.
• Balance Sheet (Accumulated Amortization): The credit increases accumulated amortization, reducing the net book value of intangible assets (a contra-asset). Net Intangible Assets = Cost − Accumulated Amortization.
• Cash Flow Statement: Amortization is a non-cash charge; it is added back (indirect method) as a non-cash expense.
• Intangible Asset Summary: The Intangible Asset Summary report reflects the updated accumulated amortization after the entry is posted.
• Trial Balance: The amortization expense and accumulated-amortization balances update accordingly.

12. Accounting Regulation Validation

13. Common Notes and Best Practices

• 365-day note: The worksheet prorates against a 365-day calendar year. This is a practical day-basis convention for amortization and differs from the 360-day convention used by the fixed-asset depreciation worksheet. Amounts are consistent for the same period because the same basis is applied every time.
• Amortization vs depreciation: This report is for intangible assets (patents, licenses, trademarks, software etc) and uses a 365-day year for day proration. The Depreciation Calculation Worksheet covers tangible fixed assets and uses a 360-day year. They are separate reports with the same workflow shape but different day conventions.
• Run the worksheet after recording acquisitions and disposals. New assets add to the book value base; mid-period disposals shorten the day count. Run it after the accounting period's asset movements are complete.
• Use it as a period-end close control. Post the suggested Amortization Entry, then confirm the Accumulated Amortization on the Balance Sheet matches the running total.
• Check the book value column. It is the net book value at the period start — cost less carried-in accumulated amortization. Verify it ties to the Intangible Assets at Cost and Accumulated Amortization accounts.
• Verify the rate column. It shows the annual percentage used; a wrong rate on the asset produces a wrong charge.
• Understand the day basis. Amortization uses a 365-day year. Manual checks using a different day basis will differ slightly.
• Assets disposed before the period start are not shown. If an asset is missing, confirm its disposal date and the period range.
• Zero or negative results are excluded. A fully amortized asset or a 0% rate asset will not appear — this is expected.

End of Amortization Calculation Worksheet Guide