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 admortire to kill, from Latin ad- + mort-, mors death. Mortmain is a legal term derived from medieval French literally meaning dead hand. Particular instances of the term include:
- Amortization (business), the allocation of a lump sum amount to different time periods, particularly for loans and other forms of finance, including related interest or other finance charges. For other uses of Amortization, see the Amortization disambiguation page Interest is a fee paid on borrowed capital Assets lent include Money, Shares, Consumer goods through Hire purchase, major assets
- Amortization schedule, a table detailing each periodic payment on a loan (typically a mortgage), as generated by an amortization calculator. An amortization schedule is a table detailing each periodic payment on a Amortizing loan (typically a Mortgage) as generated by an Amortization calculator An amortization calculator is used to determine the periodic payment amount due on a Loan (typically a Mortgage) based on the amortization process
- Negative amortization, an amortization schedule where the loan amount actually increases through not paying the full interest
- Amortized analysis, analyzing the execution cost of algorithms over a sequence of operations. In Finance, negative amortization, also known as NegAm, occurs whenever the loan payment for any period is less than the interest charged over that period so that In Computer science, especially Analysis of algorithms, amortized analysis refers to finding the average running time per operation over a Worst-case
- Amortization of capital expenditures of certain assets under accounting rules, particularly intangible assets, in a manner analogous to depreciation. For other uses of Amortization, see the Amortization disambiguation page Intangible assets are defined as identifiable non-monetary Assets that cannot be seen touched or physically measured which are created through time and/or effort and that are Depreciation is a term used in Accounting, Economics and Finance to spread the cost of an Asset over the span of several years
- Amortization (tax law)
Amortization is also used in the context of zoning regulations and describes the time in which a property owner has to relocate when the property's use constitutes a preexisting nonconforming use under zoning regulations. In Tax law, amortization refers to the cost recovery system for Intangible property.
See Also Depreciation is a term used in Accounting, Economics and Finance to spread the cost of an Asset over the span of several years
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- In accounting, the process by which the cost of an intangible asset (such as an intellectual property right) is distributed over the projected useful life of the asset.
- Such a projection with respect to a particular asset.
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