Amortisation

Formal

To gradually reduce the book value (of an asset) over a period of time equal to its projected useful life. A technical term for a form of depreciation commonly used for the assets of Goodwill and types of Intellectual Know-how.

Real-world Example

A company pays $500,000 for a patent with a 10-year useful life. It amortises $50,000 of that cost against profit each year rather than expensing it all at once.