Amortization

(1) Accounting procedure which gradually reduces the book value of an intangible asset through periodic charges to income; similar to depreciation for fixed assets.
See also: Capitalize.
(2) Method of reducing a taxpayer’s cost basis in a bond purchased at a premium, (vs. Accretion.)
(3) Reduction of debt through periodic payments of principal—as in “self-amortizing” mortgages.

Updated on: 24/04/2023