The gradual repayment of a loan or intangible asset’s cost over time.
Description
Amortization refers to spreading loan payments (principal and interest) over a fixed period or expensing an intangible asset’s cost, like patents, over its useful life. In wealth management, family offices use amortization schedules for real estate or business investments to manage cash flow and tax deductions. It ensures predictable debt servicing but requires careful planning for liquidity. Accurate amortization tracking supports financial reporting.
