AMORTIZATION

amortization  (am-<<schwa>>r-t<<schwa>>-zay-sh<<schwa>>n),  n.1.  The  act  or  result  of

gradually  extinguishing  a  debt,  such  as  a  mortgage,  usu.  by  contributing  payments  of  principal

each time a periodic interest payment is due.

negative amortization.An increase in a loan’s principal balance caused by monthly payments

insufficient to pay accruing interest.

2. The act or result of apportioning the initial cost of a usu. intangible asset, such as a patent,

over the asset’s useful life. Cf. DEPRECIATION. — Sometimes also termed amortizement. [Blacks Law 8th]