Word
amortization
Phoneticsamor·ti·za·tion
/ˌæmɝtɪˈzeɪʃən/
Definitions
01paying off a loan
n. the process of paying off a debt (like a mortgage) in regular parts over a set period of time.
n. the systematic reduction of a loan principal through a series of scheduled payments over a specified duration.
“The bank provided an amortization schedule showing how much interest we would pay each month.”
“The mortgage agreement includes a thirty-year amortization period, ensuring that the principal is fully retired by the end of the term.”
Technical
Usage
Often used with 'schedule' or 'period' to describe the timeline of debt repayment.
Synonyms
02spreading asset costs
n. spreading the cost of a business asset (like a patent or software) over the years it is used.
n. the accounting practice of spreading the cost of an intangible asset over its projected useful life.
“The company recorded the amortization of its new software patent over five years.”
“While physical goods undergo depreciation, the firm must account for the amortization of its intellectual property rights to reflect their declining value.”
Technical
Teaching tip
Learners should note that 'amortization' is used for intangible assets (like patents), while 'depreciation' is used for physical assets (like machinery).
Synonyms
Etymology
From Middle English amortisen (“to kill, alienate in mortmain”), from Anglo-Norman amorteser, alteration of Old French amortir, from Vulgar Latin *admortire (“to kill”), from Latin ad- and mors, mortem (“death”).
Etymology adapted from Wiktionary, available under CC BY-SA 4.0.
Domain
Scan code
englishreference.com/q/amortization