amortization


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.
Examples of amortizable intangibles include organization costs, patents, copyrights and leasehold interests. A reduction in a debt or fund by periodic payments covering interest and part of principal, distinguished from:
(1) depreciation, which is an allocation of the original cost of an asset computed from physical wear and tear as well as the passage of time, and
(2) depletion, which is a reduction in the book value of a resource (such as minerals) resulting from conversion into a salable product. The operation of paying off bonds, stock, a mortgage, or other indebtedness, commonly of a state or corporation, by installments, or by a sinking fund.
An "amortization plan" for the payment of an indebtedness is one where there are partial payments of the principal, and accrued interest, at stated periods for a definite time, at the expiration of which the entire indebtedness will be extinguished
Compare depreciation
@ amortization plan
An "amortization plan" for the payment of an indebtedness is one where there are partial payments of the principal, and accrued interest, at stated periods for a definite time, at the expiration of which the entire indebtedness will be extinguished
@ amortization reserve
An account created for bookkeeping purposes to extinguish an obligation gradually over a period of time
@
- amortized mortgage
@ negative amortization
This occurs when monthly payments are not large enough to cover all of the interest cost of an adjustable rate mortgage. The interest rate that isn't covered is added to the loan's principal, which then could increase to more than the amount borrowed
@ amortization schedule
A schedule of periodic payments of interest and principal owed on a debt obligation
@

Black's law dictionary. . 1990.

Look at other dictionaries:

  • 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… …   Wikipedia

  • 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 — /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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