Intangible Assets

What are Intangible Assets?

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:

  • Trademarks
  • Patents
  • Contracts

Intangible Assets are found on the Balance Sheet, whilst Amortization of Intangibles is found on the Income Statement and Cash Flow Statement.

 

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