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Simply because it is more exact from period to period than the straight-line approach, which amortizes the same amount every month, the effective interest way of amortizing a bond is thought to be better to the straight-line method.
In accounting, amortization is the systematic expense over the expected "useful economic lives" of intangible assets of the acquisition cost less the residual value to reflect their consumption, expiration, obsolescence. The process of amortization may also refer to its conclusion, as in "the tower's amortization was anticipated in 1734." For tangible assets, depreciation is the comparable idea. The methodologies used to allocate depreciation to each accounting period are typically also used to allocate amortization. But certain intangible assets, including goodwill and specific brands, can be thought to have an endless useful life and are therefore exempt from amortization.
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