What term describes the allocation of expenses based on the actual period of usage?

The term that describes the allocation of expenses based on the actual period of usage is proration. This concept involves dividing costs or revenues relative to the specific periods they pertain to, ensuring that each party is only responsible for their fair share during the time that they use or benefit from a service or asset.

For instance, in a real estate transaction where property taxes or rent may need to be divided among different owners or tenants based on their occupancy period, proration is used to allocate those expenses accurately. This ensures that each party pays only for the time they were responsible for the property, aligning expenses with the actual period of use.

In contrast, other terms like amortization refers to spreading out loan payments over a scheduled time and apportionment usually relates to dividing a total amount into parts without the direct consideration of the time period. Allocation can have a broader context and may not specifically reflect the time-based aspect as proration does.