Amortization Rules for Reserved Instances

RI Cost Amortization

As of July 01, 2024, the costs of reserved instances (RIs) are amortized based on the actual usage. The amortized amount is calculated based on the proportion of the usage deducted from RIs to the total RI usage. Amortized amount = (Usage deducted from RIs in the billing cycle/Total RI usage in the billing cycle) x Total amount of RIs in the billing cycle

There are two types of costs involved: amortized costs deducted from RIs and amortized costs not deducted from RIs.

• Amortized costs deducted from RIs: Added the new bill type Expenditure-reserved instances used.
• Amortized costs not deducted from RIs: Added the new bill type Expenditure-reserved instances unused.

Analysis of RI Cost Amortization

On the Cost Analysis page, you can analyze the amortized costs of RIs by bill type. For details, see Viewing Cost Amortization Details of Reserved Instances.

Cost amortization rules

The amortization rules for costs deducted from RIs are different from those for costs not deducted from RIs.

• Amortized amount of costs deducted from RIs = (Usage deducted from RIs in the billing cycle/Total RI usage in the billing cycle) x Total amount of RIs in the billing cycle
• Amortized amount of costs not deducted from RIs = Total amount of RIs in the billing cycle – Amortized amount of costs deducted from RIs in the billing cycle

Cost amortization example

Suppose you purchased a 1-year c3.xlarge.2 RI at $0.1 USD/hour. In February 2025, the RI amount is $67.2 USD [$0.1 USD/hour x (28 days x 24) hours], and the total RI usage is 672 hours (28 days x 24).

The following uses a Linux c3.xlarge.2 pay-per-use instance as an example to describe how the RI is amortized in February 2025.

This example assumes that the specifications of the pay-per-use instance are the same as those of the reserved instance. For details about the differences in normalization factor conversion, see Reserved Instance Overview.