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Finance Glossary

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Amortization

Definition:

The process of assigning costs or revenues across time. Example: You license 1 year of house-sitting duties on an as-needed basis for $1200. You are paid all $1200 up front. But you might be fired after 3 months. Or you might quit after 9. You amortize the value of that contract as $100 a month over the life of the license.

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