If you are adjusting statements to show the difference in cap. vs. exp, why would amortization be added back to net income is it because under capitalization there is depreciation expense and when expensing is used, there isn’t any type of depreciation/amortizaton therefore it get added back? Thanks
Yes I think you got it. Capitalization creates an asset which gets depreciated over time. This smooths out expenses over time and results in a larger asset balance. With expensing there is no asset created, the whole amount is expensed initially.