Amortization

Amortization may have one of the following meanings, depending the context of the term:

1. the systematic write-off of costs incurred to acquire an intangible asset, such as patents, copyrights, and organization expenses, over its useful life. Former IRC (check if this IRC provision is current here) §197. 2. reduction of a debt by periodic charges to assets or liabilities, such as payments on mortgages or amortization of bond premiums.

Example of Amortization:

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A trademark is acquired for $30,000 and has a 15-year life. The annual amortization deduction is $ 2,000.

U.S. and other Developed Countries International Tax Meaning

Process, applied in general in OCDE countries, of writing off the cost of an intangible asset over its useful life.

Description and Definition of Amortization

The term amortization has multiple meanings. It's the gradual reduction of a debt by means of equal periodic payments sufficient to meet current interest and liquidate the debt at maturity. It's also an expense allowed as a means of spreading the cost of an intangible asset over a period of years.

Resources

See Also

Further Reading

• Amortization in the West's Tax Law Dictionary
• Amortization in “A Dictionary of Taxation”