Intangible Assets

Intangible Assets (Definition)

Intangible assets are assets that are not physical in nature, such as goodwill, brand recognition and intellectual property.

Key aspects of intangible assets include:

1. Include patents, copyrights, trademarks, and customer lists
2. Often difficult to value precisely due to their non-physical nature
3. Can provide significant competitive advantages to a company
4. Recorded on the balance sheet if they have a measurable value
5. May be amortized over their useful life or subject to impairment testing
6. Can be internally generated or acquired through business combinations
7. Understanding intangible assets is crucial for accurate business valuation and financial reporting

Proper management and valuation of intangible assets is increasingly important in the knowledge-based economy.