What is Amortization?

Amortization or amortisation, is the reduction in value of an intangible asset with a finite useful life over time. The calculation of amortization is similar to that of straight line depreciation for a tangible fixed asset.

Most intangible assets such as copyright, have a finite useful life over which the benefit from them will be derived and therefore they need to be amortized over that lifetime.

For further information on Amortization see the Wikipedia definition.

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Last modified May 21st, 2013 by Team

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