Amortization Schedule

Amortization Schedule

An amortization Schedule is a table outlining how much of the cost of an intangible asset will be deducted each year.

If you bought a patent for $15,000 and will amortize it for 15 years, the yearly amortization will be $15,000 divided by 15 or $1,000 each year. The first two years of the amortization schedule would look like this:

Year Amortization Expense Amount of asset left to deduct
Start $15,000
1 $1000 $14,000 (15,000 -1000)
2 $1000 $13,000(14,000-1000)

In a related use, people use an amortization TABLE to amortize loans, showing the interest paid with each loan payment and the amount of the loan left to pay.

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