verb
amortize
AM-er-tize/ˈæmərtaɪz/
To spread the repayment or accounting recognition of a cost across time.
The company amortizes the loan through regular monthly payments.
Etymology
The original image is making something dead or extinguishing it. In the financial sense, the thing extinguished is a debt, gradually eliminated through payments.
In context
you pay off a balance of a debt with interest through regular payments our pension systems amortize their unfunded liabilities on a closed 30-year period
More examples
- The accountant will amortize the license cost over its useful life.
- The debt was fully amortized before the owner retired.
- They are amortizing the initial expense across several accounting periods.
Forms
amortize · amortizes · amortized · amortizing
amortization noun — Gradual repayment or accounting reduction over time.
Similar words
- repay
- Does not necessarily imply gradual installments or accounting allocation.
- write off
- Can recognize a cost immediately rather than over time.