What is Amortization for Business?

Amortization refers to the process under which the corporations or the firms decide to reduce the value of its assets over their estimated life cycles. This can also be thought as reducing or elevating that part of the asset’s value that has been used or has become obsolete while generating revenues for the firm. Amortization is not limited only till the tangible assets but it also takes into account intangible assets like patent, trademark or a trade name etc.
Amortization gives several benefits to businesses: they can be used to prepare more stable statements of expenses and gains. Tax payments are yet another benefit of amortization as amortization is tax deductible and charged as expenses of business.