| Amortization |
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The
paying off of debt in regular installments over a period of time.
The deduction of capital expenses over a specific period of time.
Similar to depreciation. A method of measuring the "consumption" of
the value of long-term assets like equipment or buildings.
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Think
of this as claiming 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. |
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