Amortization is same as depreciation in the case of tangible assets while amortization is relevant to intangible assets.
It is the reduction in the value of an intangible asset/liability such as a loan etc. over its life.
Amortization table shows the reduction in value of an intangible asset over its life for each time period.
A loan payment includes both principle and interest, so the loan amount decreases each time by the principal and this is referred to as the amortization of a loan.
Related Business Content