Definitions 
This definitions deal with the amortisation of capital expenditure. Amortisation is an accounting term for the process of reducing an amount over a period of time.
Let us look at an example of an energy company that purchases and installs $10 million worth of solar pannels. Typically we might imagine the cost of this investment being lumped at the beginning. However, a more realistic senario is to spread the cost over the useful life of the asset.
In our example the solar pannels might be amortised over a period of period of 5 years. The company's balance sheet would indicate the solor pannels as follows:
Year 0: $10m
Year 1: $8m
Year 2: $6m
Year 3: $4m
Year 4: $2m
Year 5: $0
Of course the solar pannels may be in use for more than 5 years, but in accounting terms their value has been reduced to zero after 5 years.
