Amortized

(verb)

Refers to expensing the acquisition cost in a systematic manner over economic or legal lives so as to reflect their consumption, expiry, obsolescence or other decline in value as a result of use or the passage of time.

Related Terms

Examples of Amortized in the following topics:

  • Amortization

  • Free Cash Flow

    • Free cash flows = EBIT x (1 - Tax rate) + Depreciation & Amortization - Changes in Working Capital - Capital Expenditure
    • Where Net Capital Expenditure (CAPEX) = Capex - Depreciation & Amortization and Tax Shield = Net Interest Expense X Effective Tax Rate
    • Free cash flows = Profit after Tax - Changes in Capital Expenditure x (1-d) + Depreciation & Amortization x (1-d) - Changes in Working Capital x (1-d)
    • Cash flows from operations = Earnings before Interest and Tax x (1-Tax rate) + Depreciation & Amortization - Changes in Working Capital

  • Accounting Methodologies: Amortized Cost, Fair Value, and Equity

  • Amortized Cost Method

  • Amortization of Intangible Assets

    • Amortization is the systematic write-off of the cost of an intangible asset to an expense, which effectively allocates a portion of the intangible asset's cost to each accounting period in the economic or legal life of the asset (an amortization expense).

  • Loans and Loan Amortization

  • Copyrights

    • A copyright is an amortizable, intangible asset that is used to secure the legal right to publish a work of authorship.

  • Patents

    • A patent is an amortizable, intangible asset that grants a business the sole right to manufacture and sell an invention.

  • Franchises and Licenses

    • Amortizing is a term that only applies if there is a franchise or license asset.
    • Amortization is the process of writing off the cost of an asset over its useful life.

  • Other Expenses

    • Amortization (or amortisation) is the process of decreasing or accounting for an amount over a period.
    • Amortization is generally known as depreciation of intangible assets of a firm.