Intangible assets are those that do not have a physical form. Organizations that have spent a significant amount of money to build brands may discover that the value of their intangible assets far outweighs the worth of their physical assets.
It is impossible to touch intangible assets. Intangible assets bring value to your business despite the fact that they do not have a physical existence. Long-term assets are intangible assets that will be used for more than a year at your company.
Intangible assets which can be separated from many other assets and sold by the corporation are known as identifiable intangible assets.
While intangible assets that cannot be physically removed from the corporation are known as unidentifiable intangible assets. Goodwill is perhaps the most common unidentifiable intangible asset.
There are two types of intangible assets: intellectual property and goodwill. Intellectual property, such as a design, is anything you produce with your thoughts. Many companies cannot replicate your intellectual property since you own the rights to it. On the other hand, goodwill is a measure that evaluates a variety of factors that influence the value of your brand.
Examples of intangible assets:
- Artistic-Related Intangible Assets – Literary works, motion pictures and television programs, musical works, performance events, pictures
- Contract-Based Intangible Asset – Broadcast rights, employment contracts, franchise agreements, lease agreements, licensing agreements, service contracts, use rights
- Customer-Related Intangible Assets – Customer lists, customer relationships, order backlog
- Marketing-Related Intangible Assets – Internet domain names, newspaper mastheads, noncompetition agreements, trademarks
- Technology-Based Intangible Asset – Computer software, patented technology, trade secrets