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Amortization
(redirected from amoritization)

   Also found in: Medical, Legal, Encyclopedia, Wikipedia, Hutchinson 0.06 sec.
Amortization
1. The paying off of debt in regular installments over a period of time.

2. The deduction of capital expenses over a specific period of time. Similar to depreciation, it is a method of measuring the consumption of the value of long-term assets like equipment or buildings.

Notes:
Think of amortization (the deduction of capital expenses) as a way to claim the decrease in value on your car every year. If you bought your car new for $20,000 and after the first year it is worth $17,000, theoretically you could amortize the $3,000 for tax and financial purposes.


Amortization
The repayment of a loan by installments.

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EPS = Earnings per share; EBITDA = Earnings before interest, taxes, depreciation, and amoritization.
ARM borrowers are advised to query lenders about the rate index used, adjustment frequency, negative amoritization, payment caps, lender's margin and conversion to a fixed rate.
EBITDA can be determined from the Consolidated Statement of Net Income (Loss) and Reinvested Earnings by adding to net income (loss) interest expense, income taxes, depreciation and amoritization, other gains and losses, and restructuring charges.
 
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