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1. A tax deduction for the gradual consumption of the value of an asset, especially an intangible asset. For example, if a company spends $1 million on a patent that expires in 10 years, it amortizes the expense by deducting $100,000 from its taxable income over the course of 10 years. It is often used interchangeably with depreciation, which technically refers to the same thing for tangible assets.

2. The act of repaying a loan in regular payments over a given period of time.


To write off gradually and systematically a given amount of money within a specific number of time periods. For example, an accountant amortizes the cost of a long-term asset by deducting a portion of that cost against income in each period. Likewise, an investor will usually amortize the premium each year on a bond purchased at a price above its principal.
References in periodicals archive ?
If a taxpayer is changing to the pool-of-costs method to account for package design costs, the section 481(a) adjustment equals all package design costs deducted or amortized in years prior to the year of change, less the amount that would have been amortized if the pool-of-costs method had been used in such years.
Start-up and organizational expenditures not deductible in the year in which the trade or business begins would be amortized over a 15-year period consistent with the amortization period for Sec.
In such circumstances, capitalized fees paid for the first agreement have to be amortized over the combined terms of the two agreements.
The percentage of total intangible assets that have been or will be amortized under the old law is a critical variable.
The taxpayer amortized the payment on a straight-line basis over the term of the bond through the stated maturity, citing the timing rule for hedges under Regs.
Accounting problem: May deferred credit card origination costs, as defined, be netted against the related credit card fee, if any, and the net amount amortized on a straight-line basis over the privilege period?
Note: Securitization costs, if required to be amortized, would be amortized over the term of the collateralized debt issued, not over the life of the credit card receivables.
That appellate court reversed the Tax Court decision and essentially held intangibles could not be amortized if they were acquired in conjunction with the sale of a business as a going concern (see Tax Briefs, JofA, Dec.
Frontier amortized the monthly payments over 15 years, but subsequently filed a claim for refund, on the basis that the noncompetition payments should be amortized over the life of the agreement (60 months).
If these CMOs are bought, any premiums or discounts should be amortized in accordance with FASB Statement no.
5 million consists of Senior Convertible Notes that will be repaid in equal weekly installments commencing July 5, 2002, and will be fully amortized by May 5, 2003.
The OID on both taxable and tax-exempt bonds must be amortized on an accrual basis.