The reduction in value of an intangible asset is called amortization. Intangible assets are assets that don't have a physical form, such as patents, trademarks, and copyrights. These assets have a limited useful life, and their value decreases over time due to wear and tear or obsolescence. Amortization is the process of spreading the cost of the intangible asset over its useful life, in a way that reflects its declining value. The purpose of amortization is to match the cost of the asset with the revenues it generates over time, so that the financial statements reflect a more accurate picture of the company's financial performance.