Amortization
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Amortization
Amortization or amortisation may refer to: * The process by which loan principal decreases over the life of an amortizing loan * Amortization (accounting) In accounting, amortization refers to expensing the acquisition cost minus the residual value of intangible assets in a systematic manner over their estimated "useful economic lives" so as to reflect their consumption, expiry, and obsolescence, or ..., the expensing of acquisition cost minus the residual value of intangible assets in a systematic manner, or the completion of such a process * Amortization (tax law) In tax law, amortization refers to the cost recovery system for intangible property. Although the theory behind cost recovery deductions of amortization is to deduct from cost basis, basis in a systematic manner over an asset's estimated useful econ ..., the cost recovery system for intangible property * Amortized analysis In computer science, amortized analysis is a method for Analysis of algorithms, analyzing a gi ...
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Amortizing Loan
In banking and finance, an amortizing loan is a loan where the principal sum, principal of the loan is paid down over the life of the loan (that is, amortized) according to an amortization schedule, typically through equal payments. Similarly, an amortizing bond is a Bond (finance), bond that repays part of the principal (face value) along with the coupon (bond), coupon payments. Compare with a sinking fund, which amortizes the total debt outstanding by repurchasing some bonds. Each payment to the lender will consist of a portion of interest and a portion of principal. Mortgage loans are typically amortizing loans. The calculations for an amortizing loan are those of an Annuity (finance theory), annuity using the time value of money formulas and can be done using an amortization calculator. An amortizing loan should be contrasted with a bullet loan, where a large portion of the loan will be paid at the final maturity date instead of being paid down gradually over the loan's life ...
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Amortization (accounting)
In accounting, amortization refers to expensing the acquisition cost minus the residual value of intangible assets in a systematic manner over their estimated "useful economic lives" so as to reflect their consumption, expiry, and obsolescence, or other decline in value as a result of use or the passage of time. The term amortization can also refer to the completion of that process, as in "the amortization of the tower was expected in 1734". Depreciation is a corresponding concept for tangible assets. Methodologies for allocating amortization to each accounting period are generally the same as these for depreciation. However, many intangible assets such as Goodwill (accounting), goodwill or certain brands may be deemed to have an indefinite useful life and are therefore not subject to amortization (although goodwill is subjected to an impairment test every year). While theoretically amortization is used to account for the decreasing value of an intangible asset over its useful l ...
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Amortization (tax Law)
In tax law, amortization refers to the cost recovery system for intangible property. Although the theory behind cost recovery deductions of amortization is to deduct from cost basis, basis in a systematic manner over an asset's estimated useful economic life so as to reflect its consumption, expiration, obsolescence or other decline in value as a result of use or the passage of time, many times a perfect match of income and deductions does not occur for policy reasons. Depreciation A corresponding concept for tangible assets is depreciation. Methodologies for allocating amortization to each tax period are generally the same as for depreciation. However, many intangible assets such as goodwill or certain brands may be deemed to have an indefinite useful life, or “self-created” and are therefore not subject to amortization. In the United States of America The United States Congress gives taxpayers larger deductions in the early years of an asset’s useful life. Intangible proper ...
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Amortized Analysis
In computer science, amortized analysis is a method for Analysis of algorithms, analyzing a given algorithm's Computational complexity, complexity, or how much of a resource, especially time or memory, it takes to Execution (computing), execute. The motivation for amortized analysis is that looking at the worst-case run time can be too pessimistic. Instead, amortized analysis averages the running times of operations in a sequence over that sequence. As a conclusion: "Amortized analysis is a useful tool that complements other techniques such as Worst-case execution time, worst-case and Average-case complexity, average-case analysis." For a given operation of an algorithm, certain situations (e.g., input parametrizations or data structure contents) may imply a significant cost in resources, whereas other situations may not be as costly. The amortized analysis considers both the costly and less costly operations together over the whole sequence of operations. This may include acco ...
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