amortization
gb/ˌæmɚtɪzˈeɪʃən/ us/ˌæmɚtɪzˈeɪʃən/
C1
English
törlesztés, amortizáció
NOUN
C1
BUSINESS
1
törlesztés
B1
amortizáció
C1
Usage pattern:
amortization of [a loan/debt] over [a period]
The mortgage uses a 30-year amortization, so the balance is paid down gradually over time.
A jelzáloghitelt 30 éves futamidő alatt törlesztik, így a tartozás összege idővel fokozatosan csökken.
In the early years of amortization, most of each payment may go toward interest rather than principal.
A törlesztés első éveiben előfordulhat, hogy az egyes részletek nagy része inkább a kamatra megy, nem pedig a tőketartozásra.
Making extra payments can shorten the amortization of the loan and reduce total interest.
Learner examples
Amortization helps borrowers pay off a loan slowly.
A törlesztés segít abban, hogy a hitelfelvevők fokozatosan fizessék vissza a hitelt.
Our loan has a 20-year amortization.
A hitelünket 20 év alatt kell törlesztenünk.
Common mistake:
Do not confuse amortization with paying interest only; amortization normally reduces the loan principal over time.
Meaning
loan repayment over time
Collocations
loan amortization
|mortgage amortization
|debt amortization
|amortization schedule
|amortization period
|amortization payment
|monthly amortization
|principal amortization
|amortization calculator
|amortization table
Synonyms
repayment (broader and less technical; can refer to any money paid back)
|
debt repayment (clearer in everyday language, but less specific about the payment structure)
|
loan payoff (more informal and often emphasizes finishing the debt)
Antonyms
interest-only payment (a payment that covers interest but does not reduce the principal)
|
negative amortization (the loan balance increases instead of decreasing)
Themes
finance
|banking
|mortgages
|business
Definition
the process of paying back a loan little by little over time
The gradual repayment of a loan or debt through scheduled payments, typically covering interest and reducing the principal until the balance is paid off.
NOUN
C1
TECHNICAL
2
amortizáció
C1
Usage pattern:
amortization of [an intangible asset/cost] over [a period]
The company recorded $2 million in amortization for acquired customer relationships.
A vállalat 2 millió dollár amortizációt számolt el a megszerzett ügyfélkapcsolatokhoz kapcsolódóan.
Capitalized software is subject to amortization once it is ready for use.
Az aktivált szoftvert attól kezdve kell amortizálni, hogy használatra kész.
Amortization reduced reported profit, but it did not use cash in the current period.
Learner examples
The patent has annual amortization.
A szabadalom után évente amortizációt számolnak el.
Amortization lowered the company’s profit on paper.
Az amortizáció papíron csökkentette a vállalat nyereségét.
Common mistake:
Amortization is usually for intangible assets or loan repayment; depreciation is usually for physical assets such as buildings or equipment.
Meaning
intangible asset cost allocation
Collocations
amortization expense
|accumulated amortization
|intangible asset amortization
|software amortization
|patent amortization
|straight-line amortization
|tax amortization
|annual amortization
|non-cash amortization
|amortization charge
Synonyms
write-off (less precise; may refer to reducing an asset value or recognizing a loss)
|
cost allocation (more general accounting term)
|
expensing (emphasizes recording the cost as an expense)
Antonyms
capitalization (recording a cost as an asset rather than immediately as an expense)
|
immediate expensing (recording the whole cost at once rather than spreading it over time)
Themes
accounting
|finance
|business
|tax
Definition
the accounting process of spreading the cost of something without a physical form, such as a patent or software, over several years
In accounting, the gradual allocation of the cost of an intangible asset or certain capitalized costs as an expense over a period of time.
Grammar
Dictionary form
amortization
IPA
GB/ˌæmɚtɪzˈeɪʃən/
US/ˌæmɚtɪzˈeɪʃən/
Syllables & stress
amort - iz - a - tion (4 syllables)
Stress on 3rd syllable (a)
Word forms
Noun
- Base: amortization
- Plural: amortization, amortizations
Expressions
accumulated amortization
1/əkjˈumjəlˌeɪtɪd ˌæmɚtɪzˈeɪʃən/
fixed phrase
technical
total amortization recorded
the total amortization recorded so far for an intangible asset
Examples
- The balance sheet lists the patent at cost less accumulated amortization.
- Accumulated amortization grows each year as the asset is expensed.
- The auditor reviewed the accumulated amortization for the company’s acquired technology.
Learner examples
- Accumulated amortization shows the total amount recorded so far.
- The asset value is reduced by accumulated amortization.
amortization expense
1/ˌæmɚtɪzˈeɪʃən ɪkspˈɛns/
fixed phrase
technical
periodic accounting expense
the part of an intangible asset’s cost that a company records as an expense for a period
Examples
- Amortization expense increased after the company acquired several software licenses.
- The income statement includes depreciation and amortization expense.
- The accountant calculated the annual amortization expense for the patent.
Learner examples
- Amortization expense reduced profit.
- The software has yearly amortization expense.
amortization period
1/ˌæmɚtɪzˈeɪʃən pˈɪɹiəd/
fixed phrase
business
repayment or allocation length
the time period used to pay off a loan or spread out a cost
Examples
- The mortgage has a 25-year amortization period.
- A longer amortization period usually lowers monthly payments but increases total interest.
- The patent’s amortization period is based on its estimated useful life.
Learner examples
- Our loan has a long amortization period.
- The amortization period is ten years.
amortization schedule
1/ˌæmɚtɪzˈeɪʃən skˈɛd͡ʒul/
fixed phrase
business
loan payment breakdown table
a chart that shows how a loan will be paid off over time
Examples
- The lender gave us an amortization schedule for the mortgage.
- According to the amortization schedule, the loan balance will fall below $100,000 in year ten.
- An amortization schedule can show how extra payments reduce total interest.
Learner examples
- The amortization schedule shows every monthly payment.
- I checked the amortization schedule before choosing the loan.
depreciation and amortization
1/dɪpɹˌiʃiˈeɪʃən ˈænd ˌæmɚtɪzˈeɪʃən/
fixed phrase
business
non-cash asset expenses
accounting expenses that spread the cost of assets over time; depreciation is usually for physical assets, and amortization is usually for intangible assets
Examples
- EBITDA is earnings before interest, taxes, depreciation, and amortization.
- Depreciation and amortization are added back in some cash-flow calculations.
- The notes to the financial statements explain the company’s depreciation and amortization policies.
Learner examples
- Depreciation and amortization reduced reported profit.
- Investors often look at depreciation and amortization.
depreciation and amortization
1/dɪpɹˌiʃiˈeɪʃən ˈænd ˌæmɚtɪzˈeɪʃən/
fixed phrase
technical
non-cash cost allocation
Depreciation and amortization are accounting expenses that spread asset costs over time.
Examples
- EBITDA adds back interest, taxes, depreciation, and amortization.
- The cash-flow statement added back depreciation and amortization because they were non-cash expenses.
Learner examples
- Depreciation and amortization reduced profit on the income statement.
fully amortizing loan
1/fˈʊli ˈæmɚtˌaɪzɪŋ lˈoʊn/
fixed phrase
business
loan paid off by term
a loan that is completely paid off by its regular payments by the final date
Examples
- Most standard fixed-rate mortgages are fully amortizing loans.
- With a fully amortizing loan, the final scheduled payment brings the balance to zero.
- The borrower chose a fully amortizing loan to avoid a large payment at maturity.
Learner examples
- A fully amortizing loan ends with no balance.
- Our mortgage is fully amortizing.
negative amortization
1/nˈɛɡɪtɪv ˌæmɚtɪzˈeɪʃən/
fixed phrase
business
loan balance increases
when a loan gets larger because the payments do not cover all the interest
Examples
- The loan allowed negative amortization during the first two years.
- Borrowers were warned that negative amortization could leave them owing more than they originally borrowed.
- If the payment is too low to cover interest, negative amortization can occur.
Learner examples
- Negative amortization makes the loan balance grow.
- This mortgage has a risk of negative amortization.
straight-line amortization
1/stɹˈeɪt lˈaɪn ˌæmɚtɪzˈeɪʃən/
fixed phrase
technical
equal periodic cost allocation
an accounting method that records the same amortization amount each period
Examples
- The company uses straight-line amortization for its patents.
- Straight-line amortization spreads the cost evenly over five years.
- Under straight-line amortization, the annual expense is the same each year.
Learner examples
- Straight-line amortization gives the same expense every year.
- The patent uses straight-line amortization.