amortization

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amortization

amortization , reduction, liquidation, or satisfaction of a debt. The term amortization may also refer to the sum used for that purpose. The term is commonly used in ascertaining the investment value of securities. Thus, if a security is bought at more than its face value (i.e., at a premium), a part of the premium is periodically charged off in order to bring the value of the security to par at maturity; if the security is bought at less than its face value, the discount is similarly charged off. Paying off a mortgage or any other debt by installments or by a sinking fund is amortization. Amortization by paying off a certain number of bonds each year is practiced by public corporations. National governments of limited credit as well as private companies commonly amortize by sinking funds. Governments with stronger credit usually refund debts by issuing new bonds. The satisfying of a debt by a single payment may be termed amortization. Amortization of a fixed asset refers to the depreciation of a nonmaterial investment over its estimated average life.

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amortize

The Concise Oxford Dictionary of English Etymology | 1996 | | Â© The Concise Oxford Dictionary of English Etymology 1996, originally published by Oxford University Press 1996. (Hide copyright information) Copyright

amortize (leg.) alienate in mortmain XIV; extinguish (a debt) XIX. f. amortiss-, lengthened stem of (O)F. amortir :- Rom. *admortīre, f. AD- + L. mors, mort- death.
Hence amortization XVII; in medL. admortizātiō.

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T. F. HOAD. "amortize." The Concise Oxford Dictionary of English Etymology. 1996. Encyclopedia.com. 7 Dec. 2009 <http://www.encyclopedia.com>.

T. F. HOAD. "amortize." The Concise Oxford Dictionary of English Etymology. 1996. Encyclopedia.com. (December 7, 2009). http://www.encyclopedia.com/doc/1O27-amortize.html

T. F. HOAD. "amortize." The Concise Oxford Dictionary of English Etymology. 1996. Retrieved December 07, 2009 from Encyclopedia.com: http://www.encyclopedia.com/doc/1O27-amortize.html

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