The reduction in value of an intangible asset. Intangible assets such as patents, brands, trademark, or copyright are amortized annually to reflect the reduction in the value of these assets. Accumulated amortization represents how much of an intangible asset’s value has fallen since it was originally established. Amortization and depreciation are often used interchangeably, but this is inaccurate because amortization refers to intangible assets, while depreciation refers to tangible assets.
