What does amortization pertain to?

Amortization specifically relates to the process of writing off the cost of intangible assets over a designated period. This process allows businesses to systematically reduce the carrying value of intangible assets, such as patents, trademarks, or goodwill, over their useful lives.

By recognizing amortization as an expense on the income statement, companies can match the cost of intangible assets with the revenue they help generate, thus adhering to the matching principle in accounting. This method of allocation not only reflects the consumption of the asset's economic value over time but also ensures that the financial statements present a more accurate portrayal of a company’s financial performance and position.

In this context, the other options do not accurately define amortization: tangible asset costs are typically allocated through depreciation, fixed asset depreciation is a distinct process generally applicable to physical assets, and the calculation of net profit is unrelated to the concept of amortization.