Amortization
The terms amortization and amortization (from the French amortir , ' tilgen ') have several meanings. The most common is the process by which the initial expenses for a property are covered by the income generated by it. The duration of this process is called the payback period or payback period .
Amortization is needed in economic , legal and energy-related contexts. Originally, from the Middle Ages until well into the 20th century, amortization primarily meant the church's acquisition of assets, since these goods were considered withdrawn (dead) from the secular economic cycle - hence the talk of the “ dead hand ” ( manus mortua ). The “amortization laws” of the 19th century (e.g. Prussia 1870, Bavaria 1899, France 1901) determined the amount of permissible church ownership or repealed it.
Payback period
The payback period ( English payback period ) is a time period in which the investment in a tied-up capital is flowed back. In an averaged approach, this means:
When an investment has amortized dynamically, i.e. taking into account the interest to be paid, can be calculated as follows:
average profit = average profit after depreciation and imputed interest
economy
Economics
On the one hand, this refers to the timely repayment of a long-term debt (often public bonds or mortgages ) in fixed installments.
On the other hand, amortization in economics refers to the process in which the purchase costs of a certain investment are covered by the payments made. The duration required for this is called the amortization period and can be determined with the help of an amortization calculation. In such calculations, in addition to success criteria (e.g. profitability ) for assessing an investment, risk aspects must also be taken into account. While the static amortization calculation calculates the amortization time solely on the basis of the payments in and out, the dynamic amortization calculation takes into account the different times of the payments in and out and the resulting interest .
The rationalization of people through machines also leads to amortization → the running costs are reduced, so the investment (purchase of expensive machines) is "amortized" over time.
Energy Technology
The amortization period in energy technology describes the period of time that a power plant needs to deliver just as much energy (in the form of electrical current) as was required for its construction.
See under: Harvest factor .
Computer science
See Amortized Runtime Analysis
Jurisprudence
Fiscal law
Based on the Anglo-Saxon meaning of amortization in tax law, amortization refers to the depreciation of intangible assets. In German tax law, this is particularly important if the text of the law refers to EBITDA , particularly in the interest barrier regulation .
copyright
Copyright grants protection to the author of intellectual works because he has a so-called amortization interest , i.e. H. the expenses that he has invested in the work that he wants to be reimbursed through its exploitation.
Corporate law
Germany
Amortization in company law, as described in Section 34 of the GmbH Act , is the withdrawal of business shares from individual shareholders. However, this is only permitted if it has been agreed in the articles of association.
A further distinction is made here between simple amortization, to which the shareholder has to agree, and forced amortization. The prerequisites for this can be found in Section 34 (2) GmbHG.
Liechtenstein / Switzerland
In Liechtenstein and Switzerland , "amortization" within the meaning of Art 351 Property Law (Liechtenstein) or Art 870 ZGB is understood to mean the invalidation of mortgage securities (mortgage note or validity ) or interest coupons ( interest coupons ).
