The reduction in value of goodwill is

The reduction in value of goodwill is known as amortization. Amortization refers to the process of spreading out the cost of an intangible asset over its useful life. Goodwill is an intangible asset that represents the value of a company's reputation, customer relationships, and other non-physical assets. Goodwill is considered to have a finite useful life and therefore, its value is gradually reduced over time through the process of amortization. This reduction in value is recorded as an expense in the company's financial statements.