amortised cost in layman terms
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- It's often stated that amortized analysis applies to the situation where a high cost operation is rare, and that's often the case. But not always. Consider, for example, the so-called banker's queue, which is a first-in-first-out (FIFO) queue, made out of two stacks.o the total cost over the entire sequence of n put s and n get s is: n push es, n pop s, and n move s, where a move is a pop followed by a push: in other words, 2n put s and get s result in 2n push es and 2n pop s. So the amortized cost of a single put (or get) is one push and one pop.
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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.
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- BREAKING DOWN 'Amortization'. Amortization is similar to depreciation, which is used for tangible assets, and to depletion, which is used for natural resources. When businesses amortize expenses, it helps tie the cost of the asset with the revenues it generates.
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Amortization Amortization is the write-off of an asset over its expected period of use, which shifts the asset from the balance sheet to the income statement. It essentially reflects the consumption of an intangible asset over its useful life.Amortization is most commonly used for the gradual write-down of the cost of those intangible assets that have a specific useful life. Examples of intangible assets are patents, copyrights, taxi licenses, and trademarks.t essentially reflects the consumption of an intangible asset over its useful life. Amortization is most commonly used for the gradual write-down of the cost of those intangible assets that have a specific useful life.
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How Many Steps per Day Are Enough? The average American walks 5,900 to 6,900 steps per day, putting the majority in the low active category. Somewhat Active: 7,500 to 9,999 steps per day likely includes some exercise or walking (and/or a job that requires more walking) and might be considered somewhat active.
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Amortization There are two types of amortization. One relates to the way certain business expenses are deducted, which we discussed in Section 2. The other relates to the way a loan is repaid, which we'll discuss here. Amortization describes the paying off of debt in regular installments over a period of time.
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amortization Related Terms. 1  1. Preferred term for the apportionment (charging or writing off) of the cost of an intangible asset as an operational cost over the asset's estimated useful life. 2  2. Gradual repayment of a loan in equal (or nearly equal) installments which include portions of interest and principal amounts.
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The Estimation of Construction Contract Liquidated Damages However, construction contracts are not created equal and MWRA's support cost can and will not be expended in a linear fashion. For example, MWRA estimated that there is approximately 19 of support cost for each $1 of construction.On a practical basis, one would expect MWRA to expend more in support costs on complicated and intensively inspected work than on more common and traditional construction.or example, MWRA estimated that there is approximately 19 of support cost for each $1 of construction. On a practical basis, one would expect MWRA to expend more in support costs on complicated and intensively inspected work than on more common and traditional construction.
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Intangible Assets Amortization is the systematic write-off of the cost of an intangible asset to an expense, which effectively allocates a portion of the intangible asset's cost to each accounting period in the economic or legal life of the asset (an amortization expense).
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Amortized Cost vs. Amortization About Amortization. Amortization is the process of deducting portions of the cost of a business-related purchase from several years of revenue. Most businesses amortize assets using the straight-line method.
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- The result is the amount to which amortization applies. Read the loan document to determine the life of the loan and the amortization periods. For example, if a loan is payable over a period of 120 months and loan costs are $50,000, divide the amortized costs by 120. In this case, the allowable amortization expense is $416.67 each month.
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- An accounting technique for handling bonds and other limited-term intangible assets. The amortized cost of a bond is gradually reduced on successive balance sheets, treating the bond discount as an asset until the point at which the bond matures.RL to this page: http://www.investorwords.com/16190/amortized_cost.html. Copyright © 2015 by WebFinance, Inc. ALL RIGHTS RESERVED. Reproduction of all or part of this glossary, in any format, without the written consent of WebFinance, Inc. is prohibited.
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Amortization 1 In business, amortization allocates a lump sum amount to different time periods, particularly for loans and other forms of finance, including related interest or other finance charges.
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What does amortization mean? What does amortization mean? In accounting we use the word amortization to mean the systematic allocation of a balance sheet item to expense (or revenue) on the income statement. Conceptually, amortization is similar to depreciation and depletion. An example of amortization is the systematic allocation of the balance in the contra-liability account Discount of Bonds Payable to Interest Expense over the life of the bonds.
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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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Contents: Amortization vs Depreciation If the asset is tangible, this is called depreciation. If the asset is intangible; for example, a patent or goodwill; it's called amortization. To depreciate means to lose value and to amortize means to write off costs (or pay debt) over a period of time.
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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
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Tax Accounting for Software Costs (article) The costs may be consistently treated as capital expenses that are amortized ratably over 60 months from the date of completion of the software development. The costs may be consistently treated as capital expenses and amortized ratably over 36 months from the date the software is placed in service.
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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.
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Amortized cost The amortized cost concept can be applied to several scenarios in the areas of accounting and finance, which are as follows: 1  Fixed assets. 2  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. For example, ABC International has been depreciating a machine in its production area for the last five years. 2  The $48,000 that has been charged to depreciation expense thus far is its amortized cost. 3  As another example, ABC has been amortizing the acquired cost of a patent for several years.
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- 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.
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- 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.
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Amortization The New York State Society of Certified Public Accountants offers the following definition of Amortization in a way that is easy for anybody to understand: Gradual and periodic reduction of any amount, such as the periodic writedown of a BOND premium, the cost of an intangible ASSET or periodic payment Of MORTGAGES or other DEBT.
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Bonds Payable (Explanation) Comparison of Amortization Methods. Below is a comparison of the amount of interest expense reported under the effective interest rate method and the straight-line method. Note that under the effective interest rate method the interest expense for each year is decreasing as the book value of the bond decreases.
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amortized cost Use 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.3 people found this helpful.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.