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In round numbers: If you pay $124,000 for a 12% bond that has two and a half years to run, your coupon interest would be $12,000 but you could deduct $9,500 of amortization against that for a net taxable income of $2,500 (2% of $124,000).
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(See "Steel-hungry World Makes ArcelorMittal Shine") The Luxembourg-based steel maker, controlled by billionaire Lakshmi Mittal, reported earnings before interest, tax, depreciation and amortization of $8.1 billion, against an average forecast in a Reuters poll of 10 analysts of $6.8 billion.
(See "Steel-hungry World Makes ArcelorMittal Shine") The Luxembourg-based steel maker, controlled by billionaire Lakshmi Mittal, reported earnings before interest, tax, depreciation and amortization of $8.05 billion, against an average forecast in a Reuters poll of 10 analysts of $6.75 billion, and cited growing demand in Africa, Asia and former Soviet Union.
The loan started with World Savings, an institution acquired by Wachovia, which itself was bought by Wells Fargo, a bank that had a policy against negative amortization loans, but now finds itself dealing with the debris.
Instead of claiming the $37.60 price depreciation (per $1,000 face value) as a capital loss at maturity, claim it as a monthly amortization, an ordinary deduction against interest income.
We explain that all these countries have gone through four identified phases of goodwill accounting, classified as (1) "static" (immediate or rapid expensing), (2) "weakened static" (write-off against equity), (3) "dynamic" (recognition with amortization over a long period) and (4) "actuarial" (recognition without amortization but with impairment if necessary).
For example, following lengthy comment periods, in 2006, the federal banking supervisors issued formal guidance on underwriting and managing the risks of nontraditional mortgages, such as interest-only and negative amortization mortgages, as well as guidance warning banks against excessive concentrations in commercial real estate lending.
In amortization, a business writes off, as a loss, the cost of buying assets against profits.
The amortization schedulein the Alta Genetics Annuall Report shows some fairly standard amortization practices: Buildings are amortized 5-10% per year, furniture 20-30%, and company cars 30%.
Finally, I assume two distinct amortization models.
"You're starting at the beginning" of the amortization tables.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com