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Intangible Assets

 

All assets can be classified to three main groups: tangible assets, financial assets and intangible assets. Intangible assets are those assets that aren’t financial and don’t have a real physical form on which would depend their value. Main asset classes of intangible assets:

  • Intellectual property includes such valuable assets as patents, copyrights or business know-how.
  • Brand value includes all investments in brand (company’s name) which sometimes can be very significant.
  • Goodwill, which is more accounting thing that a real asset.

 

Intangible assets mostly can be found in company’s balance sheet, however, not every company has intangible assets, but for example, the larger ones has some brand value or patents that are required for the business. Goodwill is usually is created by acquisitions when assets are acquired cheaper that the book value. To have high brand value, company needs a lot of investments in branding (commercials, social relations and similar) that would increase notoriety, and that is a long process. While copyrights or patents usually are bought as some license or is a results of R&D expenses.

 






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