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amortization

amortization

5 7.2
To reduce a debt or an asset's value little by little with regular payments
  • noun
  • /əˌmɔːr.tɪˈzeɪ.ʃən/
  • Specialized
translation icon : amortización
  • The accountant explained the concept of amortization to the clients, emphasizing how it gradually reduces their loan balance over time.
  • amortization period
  • reasonable amortization
  • depreciation and amortization

Principal collections from card holders are used to repay the ABS investors their invested principal during the amortization.

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Examples

  • The ordinance restricting off-site signs provided a five-and-one-half-year amortization period for existing nonconforming signs.

    Academic text (1996)
  • As a result, the ratepayer is required to pay for this cost through amortization.

    Academic text (2000)
  • But what this table shows is the breakdown between amortization and interest.

  • I used Basic to write a program to calculate loan amortization for my brother.

    Blog text (19)
  • However, this also means a higher debt service, since amortization of that given debt is larger with shorter repayment.

    Academic text (2001)
  • In the past, courts used precedent to uphold amortization periods as a matter of law.

    Academic text (1996)
  • Increasingly, however, schools are introducing mandatory fees for students and developing amortization plans for computer acquisitions.

    Academic text (1998)
  • Corporations were assisted in expanding manufacturing and other facilities through very liberal amortization schedules and very favorable tax privileges.

    Academic text (1990)
  • The overrun results in a yearly amortization cost of about $800,000, plus lost investment revenue of about $400,000 a year.

    Academic text (2005)
  • The ordinance contains a "three-year amortization period" to permit "the orderly discontinuation of the land application of biosolids."

    Academic text (1999)

Synonyms

depreciation
vsamortization
  • Specialized
15 6.3

Loss of value of something like a car as it gets older or wears out

spreads asset cost across a set period to allocate value gradually
deleveraging
vsamortization
  • Specialized
7 8.5

The process of reducing debt by paying off loans or selling things you own

uses scheduled payments or cost allocation to reduce obligations slowly over time

Antonyms

1.0

To make something larger or more in number

30 3.4

A group of things gathered in one place over time

Compounds

Profit a company makes before interest, taxes, depreciation and amortization

Surface Forms

amortization singular
amortizations plural

Morphology

amortization = amortize (semi-transparent) = amort + ize + ation

The base 'amortize' is related to the financial process, but the root 'amort' meaning 'dead' is not immediately clear to learners.

Etymology

The word amortization comes from Latin and the part mort which means 'death' or 'to make dead'. A helpful image is paying a debt 'little by little' until it is 'dead', so amortization is the process of gradually reducing a debt or spreading the cost of an asset over time.