Intangible Assets are those assets held by a company that are not physical (an example of a physical asset would be a factory, computers etc).
Despite not being physical and therefore not easily traded, Intangible Assets must be included when assessing the value of a company as they add value. For example, a lot of Apple's value comes from its patents and copyrights on products such as the iPhone and iPad so Apple would have a relatively large amount of Intangible Assets.
Intangible Assets usually have a certain expiry point (as opposed to Goodwill assets which are indefinite).
Some examples of Intangible Assets are:
Intangible Assets are found on the Balance Sheet, whilst Amortization of Intangibles is found on the Income Statement and Cash Flow Statement.
- Balance Sheet (BS)
- Cash Flow Statement (CFS)
- Financial Statements
- Generally Accepted Accounting Principles (GAAP)
- Income Statement (IS)