Finance
Amortization
The process of spreading the cost of an intangible asset or loan over its useful life or repayment period through scheduled, incremental payments.
Biological Context
Biological systems also amortize investments. Trees spread the metabolic cost of building wood over years of photosynthesis. The energy invested in creating a durable structure is recovered gradually through extended function.
Business Application
Amortization allows large investments to be recognized gradually rather than as immediate costs. Software development, patents, and acquisition premiums are typically amortized, matching expense recognition to the benefit period.