Spectrum License — Monthly Amortization
Amortizing the spectrum license cost over its licensed period.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Amortization Expense — Spectrum License | Expense (+) | 333,333.00 | - |
| Accumulated Amortization — Spectrum | Contra-Asset (+) | - | 333,333.00 |
💡 Accountant's Note
An JOD 80M spectrum license over 20 years amortizes at JOD 333,333/month. This is one of the largest non-cash expenses in telecom, significantly impacting EBITDA-to-EBIT conversion.
Practitioner & Systems Framework
💻 ERP Architecture
Spectrum amortisation is calculated automatically by the intangible asset module using the straight-line method over the license term. The monthly amortisation charge is posted to the intangible amortisation expense account. Spectrum amortisation is a major bridge item in the EBITDA-to-EBIT reconciliation — investors and analysts closely track this in telecom financial models. Multiple spectrum bands (800MHz, 1800MHz, 2100MHz, 3.5GHz) may have different license terms and therefore different monthly amortisation rates.
⚠️ Audit Flags
Auditors confirm the amortisation rate against the license term (total cost / number of months in license period). Test that amortisation has not commenced before the commercial launch date. If the license is renewed at a cost, assess whether the renewal cost should be added to the existing asset (extending its life) or treated as a new asset. Test that spectrum in bands where the network is no longer commercially operated is assessed for impairment. Review the presentation of spectrum amortisation in segment reporting.
📄 Required Documentation
Intangible asset register with spectrum license entries, amortisation schedule by spectrum band, commercial launch date for each band, license term and amortisation rate calculation, renewal cost assessment (if applicable), impairment test for underutilised spectrum, and EBITDA-to-EBIT bridge in management accounts.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.