amortization is
The depreciation (amortization) base is the portion of the cost of a long-lived asset subject to depreciation or amortization—capitalized cost less estimated salvage value. Dissimilar asset is a classification of long lived assets used in determining the proper method of accounting for long-lived asset exchanges. Amortization usually refers to spreading an intangible asset's cost over that asset's useful life. For example, a patent on a piece of medical equipment usually has a life of 17 years. Amortization Schedule Calculator. This mortgage loan calculator - also known as an amortization schedule calculator - lets you estimate your monthly loan repayments. It also determines out how much of your repayments will go towards the principal and how much will go towards interest. Amortization Amortization and depreciation are two ways to prorate the cost of an asset's life. Learn more about the former and how it it's calculated. Investing. Explaining Amortization In The Balance Sheet Amortization occurs when an asset’s value decreases over time, usually over its estimated useful life. What it is: Amortization is an accounting term that refers to the process of allocating the cost of an intangible asset over a period of time. It also refers to the repayment of loan principal over time. Let's assume Company XYZ owns the patent on a piece of technology, and that patent lasts 15 years. A amortization schedule is a table or chart showing each payment on an amortizing loan, including how much of each payment is interest and the amount going towards the principal balance. Thankfully, there are many freely available websites and calculators that create amortization schedules automatically. The downside to this is people are less informed on the mathematical calculations involved in creating the schedule. We provide the step-by-step calculations below for a simple fixed-rate mortgage. What is 'Amortization'. Amortization is the paying off of debt with a fixed repayment schedule in regular installments over a period of time for example with a mortgage or a car loan. Depletion is the amortization of the costs incurred to acquire rights to mine natural resources. For mining and oil and gas companies, such costs can be substantial, and these costs are normally depleted as the natural resource is extracted, using the activity method. depreciation. Many lenders have different rates on their own Websites than those posted on Bankrate.com. In order to get the Bankrate.com rate, please identify yourself as a Bankrate.com customer. Both depreciation and amortization (as well as depletion) are methods that are used to prorate the cost of a specific type of asset over the asset's life. It is important to mention that these methods are calculated by subtracting the asset's salvage value from its original cost.
An accounting term that refers to the process of allocating the cost of an intangible asset over a period of time.