Report post

What is amortization of a loan?

Amortization is the process of spreading out a loan into a series of fixed payments. The loan is paid off at the end of the payment schedule. Amortization is the way loan payments are applied to certain types of loans.

What is an amortization schedule?

Amortization schedules are used by lenders, such as financial institutions, to present a loan repayment schedule based on a specific maturity date. Intangibles are amortized (expensed) over time to tie the cost of the asset to the revenues it generates, in accordance with the matching principle of generally accepted accounting principles (GAAP).

What is amortization in accounting?

Amortization is an accounting technique used to periodically lower the book value of a loan or an intangible asset over a set period of time. Concerning a loan, amortization focuses on spreading out loan payments over time. When applied to an asset, amortization is similar to depreciation .

The World's Leading Crypto Trading Platform

Get my welcome gifts