amortization definition | Dictionary.com

am⋅or⋅ti⋅za⋅tion

[am-er-tuh-zey-shuh

n, uh-mawr-]

–noun

1.	an act or instance of amortizing a debt or other obligation.

2.	the sums devoted to this purpose.

Also, amortizement.

Origin:
1665–75; < ML a(d)mortizātiōn- (s. of admortizātiō). See amortize, -ation

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Based on the Random House Dictionary, © Random House, Inc. 2009.
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am·or·ti·za·tion (ām'ər-tĭ-zā'shən, ə-môr'-)

1. The act or process of amortizing.
2. The money set aside for this purpose.
In reckoning the yield of a bond bought at a premium, the periodic subtraction from its current yield of a proportionate share of the premium between the purchase date and the maturity date.

The American Heritage® Dictionary of the English Language, Fourth Edition
Copyright © 2009 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
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Amortization

A*mor`ti*za"tion\, n. [LL. amortisatio, admortizatio. See Amortize, and cf. Admortization.]

1. (Law) The act or right of alienating lands to a corporation, which was considered formerly as transferring them to dead hands, or in mortmain.

2. The extinction of a debt, usually by means of a sinking fund; also, the money thus paid. --Simmonds.

amortization [(am-uhr-tuh-zay-shuhn, uh-mawr-tuh-zay-shuhn)]

A term that refers either to the gradual paying off of a debt in regular installments over a period of time or to the depreciation of the “book value” (that is, the standard assessed value) of an asset over a period of time.

Amortization

1. The paying off of debt in regular installments over a period of time.

2. The deduction of capital expenses over a specific period of time. Similar to depreciation, it is a method of measuring the consumption of the value of long-term assets like equipment or buildings.

Investopedia Commentary

Think of amortization (the deduction of capital expenses) as a way to claim the decrease in value on your car every year. If you bought your car new for $20,000 and after the first year it is worth $17,000, theoretically you could amortize the $3,000 for tax and financial purposes.