When considering amortization at the personal level, a home loan (mortgage) comes to mind where a schedule is provided demonstrating principle reduction and interest. Simply stated, the schedule demonstrates a reduction of debt over the agreed upon period. However, in organizations, this term has a different meaning. As we learned with depreciation, what we are really doing is spreading the cost of a fixed asset over it's useful life. With amortization, we expense the cost of an intangible asset. An example of a fixed asset could be a computer, a natural resource, or even a building.

What is an intangible asset? Provide an example or two of an intangible asset and why do we need to amortize their cost?