Recruiter's Glossary

Examples: Trial Balance • Foreign Currency • Accounts Payable

Amortization

Term from Accounting industry explained for recruiters

Amortization is a common accounting practice that helps businesses track how costs are spread out over time. It's like dividing a big expense into smaller, more manageable pieces across months or years. For example, when a company buys expensive software that will last five years, instead of showing the full cost in one year, they spread it out. This helps give a clearer picture of business finances and makes financial statements more accurate. It's similar to depreciation, but amortization is typically used for intangible items (things you can't physically touch) like patents, copyrights, or software licenses.

Examples in Resumes

Managed amortization schedules for $2M worth of company software licenses

Created amortization tables for loan repayment analysis

Implemented new amortization policies for intangible assets across 3 business units

Typical job title: "Accountants"

Also try searching for:

Financial Accountant Corporate Accountant Financial Analyst Accounting Manager Senior Accountant Cost Accountant Fixed Asset Accountant

Where to Find Accountants

Professional Organizations

Online Communities

Job Boards

Example Interview Questions

Senior Level Questions

Q: How would you handle a complex amortization schedule for multiple company assets with different useful lives?

Expected Answer: A senior accountant should explain how they would create a comprehensive tracking system, possibly using accounting software, to monitor different assets, their useful lives, and payment schedules. They should mention considering tax implications and reporting requirements.

Q: Can you explain how you would implement a new amortization policy across multiple departments?

Expected Answer: The response should cover creating clear guidelines, training staff, ensuring compliance with accounting standards, and establishing review procedures to maintain consistency across departments.

Mid Level Questions

Q: What's the difference between amortization and depreciation?

Expected Answer: Should explain that amortization is for intangible assets (like patents or software) while depreciation is for tangible assets (like equipment or buildings), and describe how each affects financial statements.

Q: How do you calculate annual amortization expense?

Expected Answer: Should be able to explain the basic formula: taking the initial cost minus any salvage value, divided by the useful life of the asset, with practical examples.

Junior Level Questions

Q: What is amortization and why is it important?

Expected Answer: Should provide a basic explanation of spreading costs over time and why this helps in showing accurate financial pictures for businesses.

Q: What types of assets are typically amortized?

Expected Answer: Should list common intangible assets like patents, copyrights, software licenses, and loan costs, showing basic understanding of when amortization applies.