Characteristics of intangible assets
Assets are generally divided into three categories: tangible assets, cash assets, and intangible assets. Intangible assets are assets that are not physical in nature, and can be divided into specific or unspecific intangible assets. Specific intangible assets are such as being in a legal contract, and unspecific intangible assets are such as being a brand name. Intangible assets have many characteristics, including the following:[١]
- Non-material: Intangible assets are assets that are not cash or physical, are not current, and cannot be touched, i.e. they can be identified but cannot be physically measured or seen. Intangible assets do not appear on the balance sheet unless they are purchased by another company. Intangible assets do not have a recorded book value, so they are identified separately in the company's financial statements.
- Legal power of the company: Intangible assets exist as legal force for the company, and can generate future benefit and gains.
- Productive age: Intangible assets have a useful life, some intangible assets have a determinable useful life, and some intangible assets have an indeterminable useful life.
Examples of intangible assets
Examples of intangible assets include:
- patent: A patent is a right, product or process granted for an invention that provides a new way of doing something or solving a particular problem.[٢]
- Brand: It is a mark protected by intellectual property rights. It is a mark, word, or symbol that distinguishes the services and goods of a specific institution. There are many types of trademarks, including: imaginary trademarks, descriptive trademarks, arbitrary trademarks, weak trademarks, and general trademarks.[٣]
- Rights Publishing or copyright or authorship: It is a legal term used to describe the rights that authors and creators have over their artistic and literary works such as books, films, paintings, drawings, and databases.[٤]
- Goodwill or fame: It is an intangible asset that is recorded and included in the balance sheet separately. Goodwill or reputation is acquired through acquisition or business merger, and this type can be developed internally by the company.[٥]
Forms of intangible assets
Intangible assets have two basic forms, which are as follows:[٦]
- Legal intangible assets: Also known as Ownership Intellectual property, this type of assets includes copyrights, printing rights, or copyrights, and also includes trade secrets, which are secrets that only a few employees know, and they are intangible assets that were developed internally in the company, in addition to including this type of patents and trademarks.
- Competitive intangible assets: And it is considered Capital Human is the primary source of this type, and this type includes customer loyalty, structural activities, and financial leverage.
the reviewer
- ↑ “What Are the Two Main Characteristics of Intangible Assets?”, sapling, Retrieved 22/1/2022. Edited.
- ↑ “Patents”, wipo.int, Retrieved 22/1/2022. Edited.
- ↑ “Types Of Trademarks”, mandourlaw, Retrieved 22/1/2022. Edited.
- ↑ “Copyright”, wipo, Retrieved 22/1/2022. Edited.
- ↑ “Characteristics of Intangible Assets”, kolibri.teacherinabox, Retrieved 22/1/2022. Edited.
- ↑ “Understanding intangible assets and how they generate value for investors and businesses”, businessinsider, Retrieved 4/4/2022. Edited.
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