Question

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

Answer 1

Answer: Amortization

Step-by-step explanation: In simple words, amortization refers to the process under which the value of an asset is reduced over time due to wear and tear that occurs over time. It is similar to depreciation but this term is applied for intangible fixed assets such as goodwill and patents.

In such process, the initial cost of the asset is decreases over time on the basis of predetermined basis and methods. It involves transferring the cost of the intangible asset to expense account.