Amortization (accounting) ... In accounting, amortization is a method of obtaining the expenses incurred by an intangible asset arising from a decline in value as a result of use or the passage of time. Amortization is the acquisition cost minus the residual value of an asset, calculated in a systematic manner over an asset's useful economic life. Amortization could apply in two situations: while taking a loan or in a business where intangible assets are concerned. If you happen to fall in either of the categories, then this article is for you. From this article, we shall be learning about: Understanding amortization Calculating amortization Formula and examples of amortization Types of Amortization Amortization Rate and Expense What is Amortization in Simple Terms? Amortization applies to two situations: intangible assets and paying ... Amortization is a financial concept that involves spreading the cost of a loan or intangible asset over time. Learn the formulas, methods, importance and examples of amortization in accounting and finance. Amortization is an accounting technique used to periodically lower the book value of a loan or intangible asset over a set period of time.
