Glossary › Amortisation
Amortisation
Spreading an intangible asset's cost over time — or a loan's repayment schedule. The intangible cousin of depreciation.
Amortisation spreads cost over time. For intangible assets — software, patents, licences — it\'s the equivalent of depreciation. For loans, an amortisation schedule shows how each repayment splits between interest and principal until the debt retires.
Either way the principle is matching cost to the periods that benefit from it.
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