amortize

(redirected from amortizing)
Also found in: Dictionary, Thesaurus, Legal, Encyclopedia.
Related to amortizing: amortization term

Amortization

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.

amortize

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 OMNIBUS Budget Reconciliation Act of 1993 offers taxpayers an option for amortizing intangible assets acquired between July 25, 1991, and August 10, 1993 (the election period).
Over a quarter of the letters received proposed amortizing the transition obligation over a period greater than 30 years and less than 50 years.
197, added by the Omnibus Budget Reconciliation Act of 1993, provides a method for depreciating and amortizing certain intangible assets, called "Sec.
The individual makes this election by amortizing,the points computed under the chosen method and claiming the deduction on his timely filed tax return for the tax year in which the debt instrument is issued.
The disallowance of the amortization would appear to extend to the portion of the goodwill that the partnership was already amortizing due to the liquidation of B's interest.
For software not described in the three preceding paragraphs, the amount of the deduction is to be determined by amortizing its adjusted basis ratably over a 36-month period beginning with the month that the computer software is placed in service.
197 rules for amortizing intangible assets will significantly affect traditional tax strategies for the purchase and sale of business organizations.
(For the facts of the case and the Court's opinion, see the Tax Clinic item, "Supreme Court Rules Two-pronged Test Applicable When Amortizing Intangible Assets," TTA, July 1993, at 438.)
5, 1993, House Ways and Means Committee Chairman Rostenkowski reintroduced legislation as part of HR 13, the Tax Simplification Act of 1993, that provides uniform rules for amortizing intangible assets - including goodwill.