amortization is
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amortization What it is: Amortization is an accounting term that refers to the process of allocating the cost of an intangible asset over a period of time. It also refers to the repayment of loan principal over time. Let's assume Company XYZ owns the patent on a piece of technology, and that patent lasts 15 years.
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- 1 of 3. Amortization and accretion. Amortization, when used to. calculate the yield at any given. time of a ﬁxed-income investment. bought at a premium, is the writing. off of the investment’s premium over. its projected life until maturity. Accretion is the accumulation.
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- amortized. 1  transitive verb. 2  1 : to pay off (an obligation, such as a mortgage) gradually usually by periodic payments of principal and interest or by payments to a sinking fund amortize a loan. 3  2 : to gradually reduce or write off the cost or value of (something, such as an asset) amortize goodwill amortize machinery.
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- ( Accounting : Basic ) Amortization is a situation in which the value of intangible assets such as patents falls because of their age or how much they have been used. This figure represents operating profit before depreciation and amortization. The purpose of amortization is to reflect resale or redemption value.
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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.
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- Webster's dictionary defines amortization as, the systematic repayment of a debt. The emphasis is on the word systematic. Amortizing a loan means paying it down, bit by bit. Usually this means making regular monthly payments, and this is what is done for mortgage, for example.
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Amortization Law and Legal Definition The term amortization is also used in connection with loans. The amortization of a loan is the rate at which the principal balance will be paid down over time, given the term and interest rate of the note. Shorter note periods will have higher amounts amortized with each payment or period.
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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.
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- Amortization is the paying off of debt with a fixed repayment schedule in regular installments over a period of time for example with a mortgage or a car loan.
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amortization amortization. n. a periodic payment plan to pay a debt in which the interest and a portion of the principal is included in each payment by an established mathematical formula. Most commonly it is used on a real property loan or financing of an automobile or other purchase.
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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.
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What does it mean to amortize a loan? Q&A. To amortize a loan usually means establishing a series of equal monthly payments that will provide the lender with 1) interest based on each month's unpaid principal balance, and 2) principal repayments that will cause the unpaid principal balance to be zero at the end of the loan. While the amou...
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Amortization Formulas Amortization Formulas. An interest bearing debt is amortized if principal P dollars and interest I dollars are paid over a term of t years at regular payments of p dollars every (1/n)th of a year. A couple makes a down payment of $10,000 down on the purchase of a new home. The bank finances a mortgage of $400,000 at 6.5% over a term of 30 years. The loan requires monthly payments due on the first of every month. Determine approximate monthly payment, in addition to total interest paid over the life of the loan.
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- What is an 'Amortized Bond'. An amortized bond is a financial certificate that has been reduced in value for recording on financial statements. An amortized bond is one where the discount amount being amortized becomes part of its interest expense over the life of the bond.
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- 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.. 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.
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amortize verb (used with object), amortized, amortizing. 1. Finance. to liquidate or extinguish (a mortgage, debt, or other obligation), especially by periodic payments to the creditor or to a sinking fund. to write off a cost of (an asset) gradually.
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- amortization.com Ltd. An amortization schedule is a record of your loan or mortgage payments, showing, payment number, payment date, payment amount (and a breakdown of how much is principal and how much is interest) and the balance owing after that payment has been made. For a detailed explanation continue reading below.
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- An amortization schedule shows the interest applied to a fixed interest loan and how the principal is reduced by payments. It also shows the detailed schedule of all payments so you can see how much is going toward principal and how much is being paid toward interest charges.
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What is the Difference Between Term and Amortization The term of the mortgage should not be confused with the amortization. The amortization of the mortgage refers to the entire length of time that it will take for the mortgage to be paid and the house to be thusly, free and clear. The term is the period for which your current payment obligations are valid.
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Amortization The amortization schedule of your mortgage gives you a thorough breakdown of your monthly mortgage payments, and how much of it is being dedicated to principal and interest. At the start of the mortgage, most lenders allocate a large portion for paying the interest on the loan.
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- Amortization is the process of expensing out intangible assets over their useful life. It is in effect the depreciation of intangible assets. Some intangible assets have indefinite or unlimited useful life, such as goodwill. Such assets are not amortized.Others have a definite useful life and are amortized over their useful life. Most of intangible assets are amortized using straight line method. Useful life is the shorter of legal life and economic life.uch assets are not amortized. Others have a definite useful life and are amortized over their useful life. Most of intangible assets are amortized using straight line method. Useful life is the shorter of legal life and economic life.
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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. Mortgage payments are a common form of amortized loans and, interestingly enough, both the terms mortgage and amortization find their meaning in the same root word: mort..
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amortize Define amortize: to pay off (an obligation, such as a mortgage) gradually usually by periodic payments of principal and… — amortize in a sentence to pay off (an obligation, such as a mortgage) gradually usually by periodic payments of principal and interest or by payments to a sinking fund…
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Greg's Engine & Machine The rocker arm is the link between the camshaft and the valves - functioning as a lever arm to multiply the cams lobe lift to the valve lift. Stock rocker arm ratios vary between manufacturers and engine types, but generally all small block Fords come with a 1.6:1 ratio rocker arm.
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What does amortization mean? What is 'Amortization'. Amortization is the paying off of debt with a fixed repayment schedule in regular installments over a period of time for example 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.
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Loan terminology glossary Amortization: Loan payments by equal periodic amounts calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.