amortised cost in layman terms
An accounting technique for handling bonds and other limited-term intangible assets. The amortized cost of a bond is gradually reduced on successive balance sheets, treating the bond discount as an asset until the point at which the bond matures.RL to this page: http://www.investorwords.com/16190/amortized_cost.html. Copyright © 2015 by WebFinance, Inc. ALL RIGHTS RESERVED. Reproduction of all or part of this glossary, in any format, without the written consent of WebFinance, Inc. is prohibited. BREAKING DOWN 'Amortized Bond'. Amortization is an accounting method that gradually and systematically reduces the cost value of a limited life, intangible asset. Treating a bond as an amortized asset is an accounting method in the handling of bonds.Amortizing allows bond issuers to treat the bond discount as an asset over the life of the bond (until the bond's maturity). RELATED TERMS.reating a bond as an amortized asset is an accounting method in the handling of bonds. Amortizing allows bond issuers to treat the bond discount as an asset over the life of the bond (until the bond's maturity). RELATED TERMS. amortized cost. The part of the cost of an asset that is written off as amortization or depreciation in an organization's accounts, and represents accumulated amortization or depreciation to date.se amortized cost in a sentence. Show more usage examples... Each car dealership must include the amortized cost in its business plan which is usually an estimate of both the depreciation of the cars that the dealership has purchased and any damage to the vehicles that occurs while in their possession. The amortized cost concept can be applied to several scenarios in the areas of accounting and finance, which are as follows: 1  Fixed assets. 2  Amortized cost is that accumulated portion of the recorded cost of a fixed asset that has been charged to expense through either depreciation or amortization. For example, ABC International has been depreciating a machine in its production area for the last five years. 2  The $48,000 that has been charged to depreciation expense thus far is its amortized cost. 3  As another example, ABC has been amortizing the acquired cost of a patent for several years. DEFINITION of 'Amortized Bond'. A financial certificate that has been reduced in value for records on accounting statements. An amortized bond is one that is treated as an asset, with the discount amount being amortized to interest expense over the life of the bond.If a bond is issued at a discount-that is, offered for sale below its par (face value) - the discount must be treated either as an expense or it can be amortized as an asset.reating a bond as an amortized asset is an accounting method in the handling of bonds. Amortizing allows bond issuers to treat the bond discount as an asset over the life of the bond (until the bond's maturity). RELATED TERMS. It's often stated that amortized analysis applies to the situation where a high cost operation is rare, and that's often the case. But not always. Consider, for example, the so-called banker's queue, which is a first-in-first-out (FIFO) queue, made out of two stacks.o the total cost over the entire sequence of n put s and n get s is: n push es, n pop s, and n move s, where a move is a pop followed by a push: in other words, 2n put s and get s result in 2n push es and 2n pop s. So the amortized cost of a single put (or get) is one push and one pop. 1 Depreciation is used to ratably reduce the cost of a tangible fixed asset, and amortization is used to ratably reduce the cost of an intangible fixed asset. 2  The amortized cost term can also be applied to the accumulated amount of depletion of a natural resource that has been charged to expense. For example, ABC International has been depreciating a machine in its production area for the last five years. 2  The $48,000 that has been charged to depreciation expense thus far is its amortized cost. 3  As another example, ABC has been amortizing the acquired cost of a patent for several years. With each subsequent payment, a greater percentage of the payment goes toward principal. For example, on a 5-year, $20,000 auto loan at 6% interest, the first monthly payment of $386.66 would be allocated as $286.66 to principal and $100 to interest.The last monthly payment would be allocated as $384.73 to principal and $1.92 to interest.or example, on a 5-year, $20,000 auto loan at 6% interest, the first monthly payment of $386.66 would be allocated as $286.66 to principal and $100 to interest. The last monthly payment would be allocated as $384.73 to principal and $1.92 to interest. Use amortized cost in a sentence. Show more usage examples... Each car dealership must include the amortized cost in its business plan which is usually an estimate of both the depreciation of the cars that the dealership has purchased and any damage to the vehicles that occurs while in their possession.3 people found this helpful.se amortized cost in a sentence. Show more usage examples... Each car dealership must include the amortized cost in its business plan which is usually an estimate of both the depreciation of the cars that the dealership has purchased and any damage to the vehicles that occurs while in their possession. Amortized complexity is the total expense per operation, evaluated over a sequence of operations. The idea is to guarantee the total expense of the entire sequence, while permitting individual operations to be much more expensive than the average.One simple example is the behavior of C++ .o the total cost over the entire sequence of n put s and n get s is: n push es, n pop s, and n move s, where a move is a pop followed by a push: in other words, 2n put s and get s result in 2n push es and 2n pop s. So the amortized cost of a single put (or get) is one push and one pop.
A single put (or get) is one push and one pop.