Amortization is an accounting technique used to lower the cost value of a finite life or intangible asset incrementally through scheduled charges to income.
 | | Amortization | | Amortization is an accounting technique used to lower the cost value of a finite life or intangible asset incrementally through scheduled charges to income. Amortization is the paying off of debt with a fixed repayment schedule in regular installments over time like with a mortgage or a car loan. It also refers to the spreading out of capital expenses for intangible assets over a specific duration – usually over the asset's useful life –for accounting and tax purposes. Amortization can refer to the paying off of debt, over time, in regular installments of interest and principal adequate enough to repay the loan in full by maturity. Amortization can also mean the deduction of capital expenses over the asset's useful life where it measures the consumption of an intangible asset's value, such as goodwill, a patent or copyright. | | Breaking it Down: | | Amortization is like depreciation, which is used for tangible assets, and depletion, which is... | | Read More » | | Related to "Amortization" | | | | Growing-Equity Mortgage | | Offered as an option to first-time borrowers, a growing-equity mortgage calls for larger and larger payments but also shortens the term of the loan. | | Read More » | | | Intangible Asset | | An intangible asset is an asset that is not physical in nature and can be classified as either indefinite or definite. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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