What is accumulated amortization?

Accumulated amortization is the total amount of an intangible asset's cost that has been allocated to expenses over its useful life. Amortization is the process of spreading the cost of an intangible asset over its useful life. As the asset is used up or its usefulness declines, the cost is gradually charged to the income statement as an expense. Accumulated amortization is a contra-asset account that appears on the balance sheet below the intangible asset account. It reduces the carrying value or book value of the asset and reflects the amount of depreciation expense recognized to date its useful life. The calculation of accumulated amortization is the accumulated sum of a series of annual amortization expenses charged to the income statement.