When a business acquires a loan there are typically closing costs involved. Generally Accepted Accounting Principles (GAAP) require these financing costs to be amortized (allocated) over the life of the loan. There are several principles the reader needs to understand to properly calculate and assign these costs to the financial statements.
An account on the balance sheet used as an offset against amortizable assets. It equals the lifetime amount expensed to the Profit & Loss. In general is it seen as a netted amount against the total amortizable assets.