Final answer:
Intangible assets like leasehold improvements, patents, and copyrights are subjected to amortization, not depreciation, appreciation, or depletion. Amortization systematically allocates the cost of these assets over their useful lives, unlike physical assets that depreciate due to wear and tear.
Step-by-step explanation:
Noncurrent, intangible assets such as leasehold improvements, patents, and copyrights are all subject to amortization. Unlike tangible assets, which are subject to depreciation, intangible assets do not physically wear out but may become obsolete or less valuable over time. The process of amortization systematically allocates the cost of these intangible assets over their useful lives. For example, if a company purchases a patent, the cost of the patent is amortized over the period the patent will be in effect.
Amortization is similar to depreciation in that both are methods of cost allocation. However, depreciation is used for tangible assets while amortization is used for intangible assets. Appreciation refers to an increase in value, which may occur with some assets over time, but it is not a method of cost allocation. Depletion is associated with the consumption of natural resources and is not applicable to intangible assets.