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Finance & Banking vocabulary · Financial Statements

Amortized cost

Meaning in finance & banking, with examples

nounAdvanced term

In finance & banking, amortized cost means: A carrying amount adjusted for principal repayments and effective-interest amortization, with impairment where applicable.

In Turkish: itfa edilmiş maliyet

How it is used

Use for a financial-instrument measurement basis; UK spelling is amortised cost.

Example sentences

  1. The bond's amortized cost increased as the purchase discount unwound.

    Effective-interest allocation adjusts the carrying amount over time.

  2. The accounts measured the liability at amortized cost rather than a daily market quotation.

    The accounting basis differs from continuous market repricing.

Common collocations

  • amortized cost measurement
  • measure at amortized cost
  • balance sheetA financial statement showing what a company owns (assets), what it owes (liabilities) and the owners' share (equity) on a specific date.
  • accrueTo build up gradually over time, as interest does on a loan or deposit; in accounting, to record income or costs when they are earned or incurred, not when cash moves.

More terms: Financial Statements

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This page explains English vocabulary for learners. It is not financial advice.