Share This Post

Share on facebook
Share on linkedin
Share on twitter
Share on email

Amortization is the process of spreading a value over a period and reducing that value periodically. The word may refer to either reduction of asset value (spreading advance payment over invoices) or reduction of a liability (periodic payment towards a loan).  

For example, you may pay rent to your vendor for one year in a single payment. And, you will not account the whole rent value during the month of payment, instead, you’d split it into 12 parts and each part would be accounted in each subsequent months. Here, the asset value is amortized. 

Subscribe To Our Newsletter

Get updates and learn from the best

More To Explore

Do You Want To Boost Your Business?

drop us a line and keep in touch