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What is Amortization?

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The root of the word amortization stems from the old English word amortisen that meant "to kill." In its modern usage the term has several financial meanings:

1. Accounting for Intangible Assets

Amortization refers to the process of accounting for the cost of intangible assets over a period of time as prescribed by relevant tax laws.

2. Payment of Loan Principle

Amortization refers to the payment of principle over the term of a loan. This is often illustrated in an amortization schedule that shows the remaining principle after each scheduled payment.

3. Zoning Amortization

Amortization is occasionally used as a legal term to describe the time period that is given to comply with new zoning rules. For example, if a section of a city is zoned to residential from industrial, businesses in the area may be given five years to comply.
Overview: Amortization
The process of accounting for the cost of an intangible asset over time.
The reduction in principle that occurs after each payment over the life of a loan.
A time period that is granted to comply with new zoning regulations.
Related Concepts
Next: Amortization vs Depreciation

Business Costs

This is the complete list of articles we have written about business costs.
Applied Cost
Business Equipment
Capacity Cost
Capital Improvement
Carrying Costs
Closing Costs
Cost Of Capital
Cost Of Revenue
Cost Of Living
Direct Cost
Distress Cost
Fixed Costs
Friction Cost
Employee Costs
Holding Costs
Intangible Cost
Marginal Cost
Operating Cost
Operating Expenses
Legacy Costs
Outlay Cost
Lifetime Cost
Overhead Costs
Menu Costs
Relevant Cost
Normal Costs
Sunk Costs
Tangible Cost
Operational Costs
Travel Expenses
Unit Cost
Opportunity Cost
Variable Costs
Prospective Cost
Semi Variable Cost
Step Costs
Switching Costs
Transaction Costs
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