The underlying accounting principle necessitating amortization of intangible assets are/is

cost concept or matching concept

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  • Amortization of intangible assets means charging a reasonable portion of the asset on a product basis to the revenue of that year. This is done as per the Matching Concept. Matching Concept states that all expenses matched with the revenue of that period should only be taken into consideration. Amortization is treated as an expense of that particular year. In the financial statements of the organization if any revenue is recognized then expenses related to earn that revenue should also be recognized.

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