Amortisation

1. The spreading of a pension scheme surplus or deficit over a period of time, often for the purposes of granting a Contributions holiday (in the case of a surplus) or calculating deficit reduction contributions (in the case of a deficit).
2. The repayment or reduction of the principal amount of an obligation over time. For example the repayment of loan principal by instalments.
3. In financial accounting, the writing down of the value of an intangible fixed asset over time. Similar to the depreciation of tangible fixed assets.
4. More generally, the spreading of any amount or difference over time.
5. In financial accounting, where there is a difference between the initial amount and the maturity amount of a financial asset or a financial liability, the spreading of that difference over time. The spreading calculation is commonly made using the Effective interest method.

See also

• Accreting
• Amortised cost
• Amortising swap
• Average life
• Balloon payment
• Bullet maturity
• Contributions holiday
• Deficit
• Depreciation
• EBITDA
• Effective interest method