Amortization (asset) - Financial definition
Financial acronyms
The entire acronym collection of this site is now also available offline with this new app for iPhone and iPad.
Concise definition of the term amortization
In accounting, the term amortization refers to the gradual reduction of an asset's book value over its useful life.
Comprehensive definition of the term amortization
Through amortization a company charges the cost of an asset to expense in chunks over its expected period of use.
It thus gradually shifts from the balance sheet to the income statement, reflecting the depreciation assets usually experience with time.