Straight line amortization calculation is a method of accounting in which the principal amount of a loan or other asset is paid off by making regular, equal payments over a fixed period of time. Each payment includes both interest and principal and over time the amount of interest decreases as the principal balance is reduced. This approach ensures that all of the debt is repaid within the agreed-upon time frame without requiring any balloon payments at the end. By using this method, companies are able to more effectively track their assets and liabilities over time.