Small business accounting

What is Amortisation?

Amortisation is the accounting process of spreading the cost of intangible assets, such as patents, trademarks, or goodwill, over their useful economic life through regular expense allocations. Understanding what is amortisation helps UK businesses correctly record these non-physical assets in their accounts, comply with Companies House filing requirements, and optimise their tax position with HMRC.

Last updated
August 14, 2025

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What is Amortisation?

In business accounting, amortisation is a method of calculating the value of a business asset over time. It is the process of spreading out the cost of an asset over its useful life.

In relation to loans, amortisation refers to the spreading out of loans into a series of fixed monthly installments.

<p>In <a href="https://www.goforma.com/small-business-accounting/31-accounting-terms-concepts-you-need-to-know" target="_blank">business accounting</a>, amortisation is a method of calculating the value of a business asset over time. It is the process of spreading out the cost of an asset over its useful life.<br></p><p>In relation to loans, amortisation refers to the spreading out of loans into a series of fixed monthly installments.</p>

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