⚙️ What Is an Amortization Method?
An amortization method defines how the total value of an accrual is spread out over time in the general ledger.
For example, a $1,200 prepaid insurance policy over 12 months could be recognized:
Evenly each full month
Or split between partial months if using a mid-month convention
🧮 Available Amortization Methods in Keeper
Method | Description | Ideal Use Case |
Straight Line (Full-Month) | Splits the balance evenly across each full month, starting with the recognition month. | Prepaid expenses, software subscriptions, simple fixed assets |
Straight Line (Mid-Month) | Follows mid-month convention: ½ month recognized in the first and last month, with full months in between. | Fixed assets that follow IRS mid-month convention |
📘 Example: $12,000 over 12 Months
Straight Line (Full-Month)
Month | Entry Amount |
Jan | $1,000 |
Feb | $1,000 |
... | ... |
Dec | $1,000 |
Straight Line (Mid-Month)
Month | Entry Amount |
Jan | $500 |
Feb–Dec | $1,000 |
Jan | $500 |
⚠️ Mid-month logic assumes the asset is placed into service in the middle of the month, and adjusts the first and last periods accordingly.
🔁 Can I Change the Method Later?
You can update the amortization method on any schedule that has not posted yet.
If journal entries have already been posted, you will not be able to change the method.
To fully reset a schedule’s method, you will need to delete and recreate the schedule which is made simple by the delete an accrual feature.
💬 Still Need Help?
Not sure which method to use for your specific asset? Reach out to help@keeper.app or chat with us in-app—we’ll help you set it up correctly.