Manager’s Amortization Calculation Worksheet currently calculates amortization using the declining balance method. Amortization is calculated as a percentage of book value. If this is not your amortization method, you cannot use this worksheet. Capabilities for other amortization methods, including straight-line, will be added in the future.
Manager can calculate amortization automatically and enter amortization for an accounting period for all intangible assets at once. To include an intangible asset in this process, its annual amortization rate must be entered on the intangible asset form:
The annual amortization rate can be entered when purchasing new intangible assets. Or it can be added by clicking Edit for an intangible asset in the Intangible Assets tab.
After you specify amortization rates on all your active intangible assets, go to the Reports tab and click on Amortization Calculation Worksheet, then on New Report:
Create a report covering the period for which you want to calculate amortization for your intangible assets:
Fromdate will be prefilled with the current date. Change this to the first day of the accounting period for which you are calculating amortization.
Untildate will also be prefilled with the current date. Change this to the last day of the accounting period for which you are calculating amortization.
Descriptionof the amortization being calculated.
Click Create. The report will calculate amortization amount for each intangible asset.
Before creating a new report, all prior amortization must be calculated and entered for all intangible assets. The calculation worksheet bases calculations on book values of intangible assets on the first day of the defined period. If these are incorrect, both current and future amortization calculations will be wrong. (If amortization for prior accounting period has not been entered, you can calculate and enter it by creating reports with earlier date ranges. However, these must be created in chronological order.
Brilliant Industries has only one intangible asset. Based on the amortization rate entered for it, the Amortization Calculation Worksheet produces the following for 2018:
If you are satisfied with calculated figures, click on New Amortization Entry on the report:
This will copy the figures from the report into an actual transaction in the Amortization Entries tab. There, you can edit the figures if needed. The Amortization Calculation Worksheet is just a worksheet to give you good starting point so you don’t have to calculate all the figures from scratch.
Brilliant Industries reviews the worksheet from the previous example, confirming accuracy of the numbers. It clicks on New Amortization Entry to generate an amortization entry for all (in this example, only one) intangible assets for the 2018 accounting period:
Since Brilliant does not assign intangible assets to tracking codes, it leaves that field blank. It could, however, have chosen a tracking code if it desired.
For subsequent accounting periods, the book values determined by Manager after applying the calculated amortization will be used as the starting point for the next Amortization Calculation Worksheet.
For the following year, Brilliant Industries generates another Amortization Calculation Worksheet. Note the different book values and calculated results:
When intangible assets are disposed part way through an accounting period, Manager makes appropriate adjustments on the worksheet.
Brilliant Industries became worthless to the company at the end of August 2019 when products using it were discontinued. The intangible asset was disposed. As a result, only 243 days worth of amortization is calculated: