Amotization is different from depreciation . writing off is not based on life expectancy of the asset but it can also be for the purpose of renewal or replacement. it has two definitions :<\/p>\n
1. The paying off of debt in regular installments over a period of time.<\/p>\n
2. The deduction of capital expenses over a specific period of time (usually over the asset’s life). More specifically, this method measures the consumption of the value of intangible assets, such as a patent or a copyright.<\/p>\n
Amoritization is usually accompanied by putting aside money in a SINKINGFUND, so that the considerably increased cost of replacement or modernization can be met, when it is needed.<\/p>\n
Suppose XYZ Biotech spent $30 million dollars on a piece of medical equipment and that the patent on the equipment lasts 15 years, this would mean that $2 million would be recorded each year as an amortization expense.<\/p>\n
While amortization and depreciation are often used interchangeably, technically this is an incorrect practice as amortization refers to intangible assets and depreciation refers to tangible assets.<\/p>\n
there are many ways to calculate amortization such as financial calculators, spreadsheet software packages such as Microsoft Excel, or amortization charts and tables.<\/p>\n
# Amortization (business), the allocation of a lump sum amount to different time periods, particularly for loans and other forms of finance, including related interest or other finance charges.<\/p>\n
* Amortization schedule, a table detailing each periodic payment on a loan (typically a mortgage), as generated by an amortization calculator.
\n* Negative amortization, an amortization schedule where the loan amount actually increases through not paying the full interest<\/p>\n
# Amortized analysis, analyzing the execution cost of algorithms over a sequence of operations.<\/p>\n","protected":false},"excerpt":{"rendered":"
Amotization is different from depreciation . writing off is not based on life expectancy of the asset but it can also be for the purpose of renewal or replacement. it has two definitions : 1. The paying off of debt in regular installments over a period of time. 2. The deduction of capital expenses over […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[806,805,807,804,803,809,808,802,810,811],"class_list":{"0":"post-173","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-general","7":"tag-amortization","8":"tag-amortization-calculators","9":"tag-amortization-mortgage","10":"tag-amortization-schedule","11":"tag-amortization-table","12":"tag-define-amortization","13":"tag-how-to-calculate-amortization","14":"tag-loan-amortization","15":"tag-mortgage-calculator-amortization","16":"tag-what-is-amortization","17":"entry"},"_links":{"self":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/173","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/comments?post=173"}],"version-history":[{"count":0,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/173\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/media?parent=173"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/categories?post=173"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/tags?post=173"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}