Amortization

Amortization

Amortization or amortisation is the process of decreasing, or accounting for, an amount over a period of time. The word comes from Middle English "amortisen" to kill, alienate in mortmain, from Anglo-French "amorteser", alteration of "amortir", from Vulgar Latin "admortire" to kill, from Latin ad- + mort-, mors death. Particular instances of the term include:
*Amortization (business), the allocation of a lump sum amount to different time periods, particularly for loans and other forms of finance, including related interest or other finance charges.
**Amortization schedule, a table detailing each periodic payment on a loan (typically a mortgage), as generated by an amortization calculator.
**Negative amortization, an amortization schedule where the loan amount actually increases through not paying the full interest
*Amortized analysis, analyzing the execution cost of algorithms over a sequence of operations.
*Amortization of capital expenditures of certain assets under accounting rules, particularly intangible assets, in a manner analogous to depreciation.
*Amortization (tax law)Amortization is also used in the context of zoning regulations and describes the time in which a property owner has to relocate when the property's use constitutes a preexisting nonconforming use under zoning regulations.

ee also

* Depreciation


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  • amortization — I noun clearance, defrayal, defrayment, disbursement, discharge, extinction of a debt, extinguishment of claim, liquidation of a debt, payment, remittance, satisfaction associated concepts: amortization contract, amortization of a mortgage,… …   Law dictionary

  • Amortization — A*mor ti*za tion, n. [LL. amortisatio, admortizatio. See {Amortize}, and cf. {Admortization}.] 1. (Law) The act or right of alienating lands to a corporation, which was considered formerly as transferring them to dead hands, or in mortmain. [1913 …   The Collaborative International Dictionary of English

  • amortization — (n.) 1670s, in reference to lands given to religious orders, from M.L. amortizationem (nom. amortizatio), noun of action from pp. stem of amortizare (see AMORTIZE (Cf. amortize)). Of debts, from 1824 …   Etymology dictionary

  • amortization — [ə môr′tiz məntam΄ər ti zā′shən, ə môr΄təzā′shən] n. 1. an amortizing or being amortized 2. money put aside for amortizing a debt, etc.: also amortizement [ə môr′tiz mənt] …   English World dictionary

  • amortization — (1) The process of making regular, periodic decreases in the book or carrying value of an asset. For example, when a bond is purchased at a price above 100, the difference between the purchase price and the par value, the premium, is amortized.… …   Financial and business terms

  • amortization — A cost *allocation method used to record the reduction in value of an asset over time. The classic case of amortization is the matching of the cost of an item of *property, plant, and equipment to its *useful life. Assets generally lose value as… …   Auditor's dictionary

  • amortization — / amortazeyshsn/ In accounting, the allocation (and charge to expense) of the cost or other basis of an intangible asset over its estimated useful life. Intangible assets which have an indefinite life (e.g., goodwill) are not amortizable.… …   Black's law dictionary

  • amortization — / amortazeyshsn/ In accounting, the allocation (and charge to expense) of the cost or other basis of an intangible asset over its estimated useful life. Intangible assets which have an indefinite life (e.g., goodwill) are not amortizable.… …   Black's law dictionary

  • amortization — /am euhr teuh zay sheuhn, euh mawr /, n. 1. an act or instance of amortizing a debt or other obligation. 2. the sums devoted to this purpose. Also, amortizement. [1665 75; < ML a(d)mortization (s. of admortizatio). See AMORTIZE, ATION] * * * In… …   Universalium

  • Amortization — The repayment of a loan by installments. The New York Times Financial Glossary * * * amortization a‧mor‧ti‧za‧tion [əˌmɔːtaɪˈzeɪʆn ǁ ˌæmərtə ] also amortisation noun 1. [countable, uncountable] ACCOUNTING …   Financial and business terms

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