amortization

Meanings

• noun

  The process of allocating and accounting for the intangible cost of an asset over its useful life.

  - "The company's amortization schedule for the intangible asset was complex."
  - "The amortization of the patent allowed the company to recognize the expense over its useful life."

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Variants

List of all variants of amortization that leads to same result
amortization , amortizations

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Etymology

origin and the way in which meanings have changed throughout history.

Derived from the Latin word 'amortizare,' meaning 'to make dead' or 'to kill off,' originally used to refer to the process of extinguishing a debt.

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Trivia

Any details, considerations, events or pieces of information regarding the word

1. Amortization is a non-cash expense and does not involve the exchange of actual currency.

2. The term 'amortization' is also used in the context of real estate loans to refer to the gradual repayment of the principal portion of the loan over time.

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Related Concepts

informations on related concepts or terms closely associated with the word. Discuss semantic fields or domains that the word belongs to

1. Depreciation: Both amortization and depreciation are methods of allocating the cost of an asset over its useful life, but they apply to different types of assets. Amortization is used for intangible assets, while depreciation is used for tangible assets.

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Culture

Any cultural, historical, or symbolic significance of the word. Explore how the word has been used in literature, art, music, or other forms of expression.

Amortization is a financial term used primarily in business and accounting contexts. It is an important concept in managing the balance sheet and cash flow of a business.

How to Memorize "amortization"

1. visualize
   

   - Imagine an intangible asset, such as a patent or copyright, gradually being used up and its value decreasing over time. The amortization process represents the allocation of the intangible cost of that asset over its useful life.

2. associate
   

   - Associate the term 'amortization' with the idea of spreading out the cost of an intangible asset over its useful life.

3. mnemonics
   

   - Use the mnemonic 'Allocate Money Over Useful Time' to remember the meaning of amortization.

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