amortization Hear it!

amortization definition - finance
  1. An accounting technique that reduces the cost of an intangible asset, such as goodwill, by assessing the charge against income over a specific amount of time. For a tangible asset, such as machinery, the term depreciation is used.
  2. The act of reducing debt by making regular principal and interest payments.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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