honey_2132

 Profile Answers by honey_2132 

• Oct 16th, 2007

 

1. The paying off of debt in regular installments over a period of time.

2. The deduction of capital expenses over a specific period of time (usually over the asset's life). More specifically, this method measures the consumption of the value of intangible assets, such as a patent or a copyright.

3. Suppose XYZ Biotech spent $30 million dollars on a piece of medical equipment and that the patent on the equipment lasts 15 years, this would mean that $2 million would be recorded each year as an amortization expense.

While amortization and depreciation are often used interchangeably, technically this is an incorrect practice because amortization refers to intangible assets and depreciation refers to tangible assets.

vasudeo007

 Profile Answers by vasudeo007 

• Aug 18th, 2008

 

Amortisation is a concept very similar to depreciation.

In case of depreciation, it is charged to assets marking reduction in their value.

In case of loans the repayment means amortisation.

In case of certain assets which are not tangible assets their reduction in value is called amortisation.

Example: Patent rights, copyrights, etc.

Vasudeo

sulabhkapoor

 Profile Answers by sulabhkapoor 

• Feb 3rd, 2010

 

1. The paying off of debt in regular installments over a period of time.

2. The deduction of capital expenses over a specific period of time (usually over the asset's life). More specifically, this method measures the consumption of the value of intangible assets, such as a patent or a copyright.