amortization legal definition
c4603623dcde19b96d50b22779857910
Amortization Law and Legal Definition Amortization Law and Legal Definition. Amortization may refer to a plan to repay a loan in equal installments over a period of time, whereby each periodic payment includes principal and interest, and the amount of the payment applied to the principal gradually increases over time as the interest payments are reduced.
64d264fcf1de809af23c9d195d199829
amortization amortization [(am-uhr-tuh-zay-shuhn, uh-mawr-tuh-zay-shuhn)] A term that refers either to the gradual paying off of a debt in regular installments over a period of time or to the depreciation of the “book value” (that is, the standard assessed value) of an asset over a period of time.
fbd0dbd082db220bcabedc130cfdd063
- Amortization Amortization and depreciation are two ways to prorate the cost of an asset's life. Learn more about the former and how it it's calculated. Investing. Explaining Amortization In The Balance Sheet Amortization occurs when an asset’s value decreases over time, usually over its estimated useful life.
6e1747710ecc6ca16ef119c230bbe4ec
- DEFINITION of 'Amortization Of Intangibles'. A tax term relating to the practice of deducting the cost of an investment in a qualifying non-tangible asset over the projected life of the asset.The cost basis of the qualifying intangible asset is amortized over a 15-year period, irrespective of the actual useful life of the asset.In the year the asset is acquired and sold, the amount of amortization deductible for tax purposes is prorated on a monthly basis.Intangible amortization is reported on Form 4562.n the year the asset is acquired and sold, the amount of amortization deductible for tax purposes is prorated on a monthly basis. Intangible amortization is reported on Form 4562.
73b42e2841ef97317e2e2189b1fb8576
- loan amortization schedule. Definition. Schedule of loan payments that shows due dates and the amount of money that will applied to the principal and the amount that will go towards the interest. This schedule may be adjusted if a borrower pays more than expected during a specific billing period.
d9ce357781c93ad3ac371c77bf01b07d
Amortization (tax law) Intangible property which is subject to amortization is described in 26 U.S.C. §§ 197(c)(1) and 197(d) and must be property held either for use in a trade, business, or for the production of income.
4cdae069c2b96a3ea63e28a67b19d40f
Loan Amortization Schedule An amortization schedule is a list of payments for a mortgage or loan, which shows how each payment is applied to both the principal amount and the interest. The schedule shows the remaining balance still owed after each payment is made, so you know how much you have left to pay.
e515b7522cc509aed0aae8f1702d0623
How is an Amortization Schedule Calculated? A amortization schedule is a table or chart showing each payment on an amortizing loan, including how much of each payment is interest and the amount going towards the principal balance. Thankfully, there are many freely available websites and calculators that create amortization schedules automatically.
3fefb0b4203eaa68dbd3db9f1b2682b2
What is the difference between amortization and depreciation? Amortization usually refers to spreading an intangible asset's cost over that asset's useful life. For example, a patent on a piece of medical equipment usually has a life of 17 years.
112a7569f72426581a319311470fae42
amortize When you amortize a loan, you kill it off gradually by paying it down in installments. This is reflected in the word's etymology. Amortize derives via Middle English and Anglo-French from Vulgar Latin admortire, meaning to kill. The Latin noun mors (death) is a root of admortire; it is related to our word murder, and it also gave us a word naming a kind of loan that is usually amortized
cc0556b286de2dfce0e9bc02ba77a50d
amortized cost amortized cost. The part of the cost of an asset that is written off as amortization or depreciation in an organization's accounts, and represents accumulated amortization or depreciation to date.se amortized cost in a sentence. Show more usage examples... Each car dealership must include the amortized cost in its business plan which is usually an estimate of both the depreciation of the cars that the dealership has purchased and any damage to the vehicles that occurs while in their possession.
23fecd7e9a58a7259dd6de03747d728c
Amortization schedule An amortization schedule indicates the specific monetary amount put towards interest, as well as the specific amount put towards the principal balance, with each payment. Initially, a large portion of each payment is devoted to interest. As the loan matures, larger portions go towards paying down the principal.
5235c8bc0fde12278c425e3ab4ecee8b
What Is Amortization? Amortization in lending. In the context of lending, amortization is the process of paying off debt with a fixed repayment schedule over a specified period of time. Amortization typically comes into play with mortgages and auto loans.
cdc742d61425bffd876c1d9d5573a59a
amortization amortization in Culture Expand. amortization [(am-uhr-tuh-zay-shuhn, uh-mawr-tuh-zay-shuhn)] A term that refers either to the gradual paying off of a debt in regular installments over a period of time or to the depreciation of the “book value” (that is, the standard assessed value) of an asset over a period of time.
16f25231696f6817d19ff7651831b48c
Amortization Amortization. The repayment of principal from scheduled mortgage payments that exceed the interest due. The scheduled payment is the payment the borrower is obliged to make under the note. The scheduled payment less the interest equals amortization. The loan balance declines by the amount of the amortization, plus the amount of any extra payment. If such payment is less than the interest due, the balance rises, which is negative amortization.
989e11415ae5bd5e6aef08c09e1ddbd5
What does amortization mean? DEFINITION of 'Amortization'. 1. The paying off of debt with a fixed repayment schedule in regular installments over a period of time. Consumers are most likely to encounter amortization with a mortgage or car loan. 2. The spreading out of capital expenses for intangible assets over a specific period of time (usually over the asset's useful life) for accounting and tax purposes. Amortization is similar to depreciation, which is used for tangible assets, and to depletion, which is used with natural resources.
a67b459012788a21a31c4c5585ef002f
What is Amortization? The process of paying off a loan through specifically structured periodic payments is known as amortization. This type of loan is different from other loans due to the way the amount and the structure of each payment is determined. This term means to deaden or kill, as in to kill off or eliminate the loan a bit at a time, via regular payments.
8443e8011456508588fbfa76772c2c48
- Amortization Schedules. An amortization schedule is a breakdown of each payment showing the allocation to interest and principal and. the outstanding principal balance. To prepare a schedule we need to know some background information.
caff2c77d3058e66b64cc311da3e8e54
- Amortization (or amortisation) is the process of decreasing, or accounting for, an amount over a period.
74aa36cc083b74c1cc0fe86dea72c690
What Is Amortization? Amortization in accounting. When a company amortizes an asset, it is spreading out the cost of that asset over the course of its useful life. Amortization roughly matches the expense of an asset with the revenue it brings in. As a business writes off an asset, that asset is shifted from the balance sheet to the income statement. Amortization is used to write off intangible assets that have a specific useful life.
4848e5ee94c3c4889e8ef7d34517b03f
Amortization 1. A tax deduction for the gradual consumption of the value of an asset, especially an intangible asset. For example, if a company spends $1 million on a patent that expires in 10 years, it amortizes the expense by deducting $100,000 from its taxable income over the course of 10 years.
1f53d35f5ae4c43fa59e5c92c4331671
What does amortization mean? 2. The spreading out of capital expenses for intangible assets over a specific period of time (usually over the asset's useful life) for accounting and tax purposes. Amortization is similar to depreciation, which is used for tangible assets, and to depletion, which is used with natural resources.
126b80c9c3351572434247f24e65812c
- Amortization is a method of recovering (deducting) certain capital costs over a fixed period of time. It is similar to the straight line method of depreciation. The various amortizable costs covered in this chapter are included in the list below. However, this chapter does not discuss amortization of bond premium. For information on that topic, see chapter 3 of Publication 550, Investment Income and Expenses.
dbeeb067f5224dfa6610f3050f2e7a4d
Amortization Amortization Term Concept of Amortization Term in the context of Real Property A short definition of Amortization Term: The time required to pay off a mortgage if no additional principal payments are... Depletion See also An exhaustion or gradual reduction of an asset.
31252914d33846b0c1a6e20d2c38658d
Differences Between Amortizations & Accruals Amortization is the systematic recognition of an income or expense related to an accrual or other asset. Whereas accruals create assets or liabilities, amortizations create income or expense.
7687c4c5a735e31e4b016e580f9aa21f
Amortized cost 1 Amortized cost is that accumulated portion of the recorded cost of a fixed asset that has been charged to expense through either depreciation or amortization. 2  Depreciation is used to ratably reduce the cost of a tangible fixed asset, and amortization is used to ratably reduce the cost of an intangible fixed asset.