An accounting term that refers to the process of allocating the cost of an intangible asset over a period of time. It also refers to the repayment of loan principal over time.When a hotel amortizes expenses, it helps tie the cost of the asset with the revenues it generates. For example, if a hotel sales office buys a ream of paper, it writes off the cost in the year of purchase and generally uses all the paper the same year. Conversely, with alarge asset like a building, the owner reaps the rewards of the expense for years, so it writes off the expense incrementally over several years.A related term, depreciation, refers to tangible assets.
