Hi, Kevin,

The short answer is yes.  You can amortize an intangible asset in the SFA with a life of only one year.

If you want to see the amortization on a monthly basis, a number of reports are available to you.  For example, if you are depreciating monthly, you can see the monthly amortization in a Depreciation Expense Report.  After you have created the asset, you could also run the Monthly Projection Report and see the projected amortization for each month over the course of the year.

If you are interested in seeing the data for a "series of intangible assets," put those intangibles into a group and then run the report for that group.

Bob - 

Thank you.

Are useful lives of less than one year supported?

Kevin

Hello Kevin,

The depreciation method that allows a life less than 1 year life is Straight Line (SL).

~Lovisa

For intangibles, property type = Z, the answer is yes.  But for my own edification, I'm curious, Kevin, and would love to hear about your situation if you can share more about the specifics of what you're doing.

The standard recovery for intangibles is 15 years according to Section 197 of the Internal Revenue Code.  But you have a little more leeway when it comes to financial reporting.  The general rule in GAAP is the useful life of the property.  So, when you're asking about setting up a new asset with a life less than one year, that's not very long!

Bob - "Intangibles" is not really the appropriate description of the assets I'd like to amortize over one year (or less).  We have a number of prepaid expenses (e.g. software maintenance contracts) which we amortize over 1 year or less; most are 1 year agreements, but some are for 3 or 6 months.  Sorry for the confusion.  Kevin 

Bob - Yes; we record prepaids as current assets, and the new company, etc. approach makes sense for tracking prepaids.  Thanks for all of your help!  Kevin

Kevin, thank you for the clarification.  And I can now understand the confusion.

It is possible to record expenses such as prepaid maintenance expenses on computer servers, fees for cloud subscriptions and software support agreement plans, etc. as intangible assets and amortize them over their lives.  The SFA program is flexible enough to be used in this way.  Generally speaking, however, these types of expenses are not recorded as intangible assets.  That’s because such expenses are reflected in the Current Assets area on the Balance Sheet and not included with Fixed Assets or Intangible Assets.  Therefore, they are normally accounted for separately.

What you could do, Kevin, is create a new company in the SFA, and the sole purpose of this new company would be to track prepaid expenses.  There, you could create the assets that you want and amortize them accordingly.

Hope this is helpful to you.

Glad to help.  Thanks for the feedback, Kevin.