{"id":6127,"date":"2022-07-07T20:31:56","date_gmt":"2022-07-07T20:31:56","guid":{"rendered":"https:\/\/intelekbusinessvaluations.com\/en-us\/?p=6127"},"modified":"2022-11-28T21:53:34","modified_gmt":"2022-11-28T21:53:34","slug":"intangible-assets","status":"publish","type":"post","link":"https:\/\/intelekbusinessvaluations.com\/en-us\/business-valuations\/intangible-assets\/","title":{"rendered":"Intangible Assets"},"content":{"rendered":"

Intangible assets are those that are not stored or accumulated in physical form. Like all assets, intangible ones can be owned, transferred, or licensed, and they have value. An intangible asset can be any intellectual property or brand \u2014 trademarks,\u00a0copyrights<\/strong><\/a>, and patents are all classified as such.<\/p>\n

Intangible assets usually exist in opposition to tangible assets. They can be either definite or indefinite, depending upon their nature.<\/p>\n

Any company\u2019s name will be considered an indefinite intangible asset because one has permission to use the said name as long as the business is in operation. On the other hand, a definite intangible asset can be a legal agreement or a contract. For instance, if you sign an agreement to do business under the patent of some other company without any plans of extending the agreement, this will be considered a definite intangible asset.<\/p>\n

Although there is some form of tangible evidence of the existence of an intangible asset, the value of the intangible asset does not reside in the physical elements of that tangible evidence.<\/p>\n

\"Intangible<\/h2>\n

Intangible Assets vs. Tangible Assets<\/h2>\n

\u00a0<\/strong>Tangible assets are basically the physical assets of the company\u2014for example, land, equipment, or computers that the company owns. Tangible assets are used by the company as a source of producing their products and generating sales. Conversely, intangible assets do not have physical value, but they do possess a significant monetary value since they represent potential revenue-generating capacity.<\/p>\n

One can say that tangible assets form the backbone of a company, as they provide means for the company to produce its products and services. Since they are physical assets, tangible assets of a company can be destroyed or damaged accidentally by naturally occurring incidents or any kind of outside threat. Tangible assets include land, buildings, vehicles, equipment, furniture, inventory, stocks, cash, and bonds.<\/p>\n

Examples of Intangible Assets<\/h2>\n

\u00a0<\/strong>Intangible assets are not physical assets, and this is the reason why they only appear on the balance sheet when a company acquires them or if it is required to identify and value them for financial reporting purposes. For example, if one company purchases a patent from another company for a fixed amount, then that fixed amount will be recorded as a transaction by the company that is purchasing the patent.<\/p>\n

Different types of intangible assets include:<\/p>\n

technology related: patents, computer software, know-how<\/p>\n