Amortization is the systematic allocation of the cost of intangible assets (with finite useful lives) over their useful life. Unlike depreciation for tangible assets, amortization applies to intangible assets like patents, copyrights, trademarks, licenses, goodwill, software. Goodwill represents excess of acquisition cost over fair value of identifiable net assets; amortized over useful life or tested for impairment annually. Patents grant exclusive rights for limited periods; amortization period matches patent life or expected benefit period. Copyrights protect original works; amortization depends on expected revenue generation period. Trademarks have indefinite lives but are amortized if purchased as part of business combination. Licenses and permits are amortized over their license period. Software costs are capitalized if they meet criteria and amortized over expected useful life. Amortization calculation is similar to depreciation; straight-line method is most common. Formula: Annual Amortization = (Cost - Residual Value) / Useful Life. Journal entry: Debit Amortization Expense, Credit Accumulated Amortization (contra account). Balance sheet presentation: Show intangible asset at cost less accumulated amortization. Impairment testing is required for goodwill and indefinite-life intangibles annually. Disclosure of intangible assets, useful lives, and amortization methods is required in notes. Exam tip: Distinguish between depreciation and amortization; understand the nature of different intangible assets; practice amortization calculations; know impairment testing basics.