amortised

Amortised is an adjective used in finance, accounting, and computer science to describe the allocation of a cost or workload over time. In accounting, amortisation (amortization in American spelling) refers to spreading the cost of an intangible asset over its finite useful life. The cost is allocated by a systematic method, commonly straight-line, and is recognized as an amortisation expense in each period, reducing the carrying amount of the asset on the balance sheet. Intangible assets include patents, trademarks, software, and customer relationships; impairment or obsolescence can affect the amortisation schedule.

In financial reporting, amortised cost is a measurement basis for financial assets and liabilities. Initially recognised at fair value, subsequently measured at amortised cost using the effective interest rate, minus principal repayments and impairment allowances.

In lending, an amortised loan is one where regular payments cover both interest and principal, so the outstanding balance declines over time. A typical amortisation schedule shows a constant payment amount, with the interest portion decreasing and the principal portion increasing until repayment at maturity.

In computer science, amortised analysis studies the average cost per operation over a sequence of operations, even if some individual operations are expensive. This yields tighter guarantees than worst-case per-operation costs. Classic examples include dynamic array resizing and some data-structure operations that amortize expensive work over many cheap operations.

Amortisation generally contrasts with depreciation (for tangible assets) and with quick versus long-term budgeting in tax and accounting. The spelling varies by region: amortisation (UK/Commonwealth) and amortization (US).