Which statement is true regarding amortization?

The statement that amortization uses the straight-line method based on the useful life of tangible assets is correct. Amortization specifically refers to the gradual reduction in value of intangible assets over time, where it is commonly calculated using the straight-line method. This means that the same amount is deducted from the asset's value in each accounting period, reflecting its systematic decline in value due to usage or obsolescence.

Amortization is distinct from depreciation, which is the analogous process for tangible assets. While both serve the purpose of allocating the cost of an asset over its useful life, they apply to different categories of assets.

The other statements do not accurately convey the nature of amortization or its application. For example, while amortization is primarily related to intangible assets, the chosen response correctly acknowledges its calculation method, which involves a simple and systematic approach associated with useful life. Hence, the straight-line method is a key characteristic of how amortization is calculated for intangible assets, reinforcing the importance of understanding asset management and financial reporting in this context.