Definition: Accumulated amortization is the cumulative amount of all amortization expense that has so far been charged against an intangible asset. Amortization is used to indicate the gradual consumption of an intangible asset over time. Amortization is nearly always calculated on a straight-line basis. The typical amortization entry is a debit to amortization expense and a credit to the accumulated amortization account.
Accumulated amortization is recorded on the balance sheet as a contra asset account, so it is positioned below the unamortized intangible assets line item; the net amount of intangible assets is listed immediately below it.
It is not common to report accumulated amortization as a separate line item on the balance sheet. More typical presentations are to include accumulated amortization in the accumulated depreciation line item, or to present intangible assets net of accumulated amortization.
The cost of an intangible asset that has not yet been charged to amortization expense is called net of accumulated amortization, and is calculated as the original cost of an intangible asset, minus its accumulated amortization.