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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 ?
The nine-year equity loan amortizes on a 30-year schedule.
The 10-year refinance amortizes on a 30-year schedule.
Although the final maturity of this series is still in 2007 as under the original terms, more principal (US$145 million) is scheduled to amortize in 2007 than was originally scheduled (US$11 million).
Colonial Square Cooperative, Ann Arbor MI - 427-unit complex received a five-year $1,750,000 Fannie Mae DUS Market Rate Co-op loan which amortizes on a 5-year schedule.