what is the amortization of intangibles 
amortization of intangibles also simply known as amortization is the process of expensing the cost of an intangible asset over the projected life of the asset for tax or accounting purposes intangible assets such as patents and trademarks are amortized into an expense account called amortization tangible assets are instead written off through depreciation also the amortization process for corporate accounting purposes may differ from the amount of amortization used for tax purposes understanding the amortization of intangiblesfor tax purposes the cost basis of an intangible asset is amortized over a specific number of years regardless of the actual useful life of the asset as most intangibles don t have a set useful life the internal revenue service irs allows intangibles to be amortized over a 15 year period if it s one of the ones included in section 197 1intangible assets are nonphysical assets that can be assigned an economic value intellectual property ip is considered to be an intangible asset and is a broad term that encompasses most intangible assets most ip is covered under section 197 examples of these section 197 intangible assets include patents goodwill trademarks and trade and franchise names 2not all ip is amortized over the 15 year period set by the irs however there are certain exclusions such as software acquired in a transaction that is readily available for purchase by the general public subject to a nonexclusive license and has not been substantially modified in those cases and select others the intangibles are amortized under section 167 34per generally accepted accounting principles gaap businesses amortize intangibles over time to help tie the cost of an asset to the revenues it generates in the same accounting period special considerations