Assets which don’t have a physical existence and can not be touched and felt are called intangible assets. Unlike tangible assets which can be touched & felt intangible assets are nonphysical, invisible, long-term and difficult to quantify.
This type of asset can either be definite i.e. it will expire after a certain time period or indefinite i.e. it will not expire and is not time-sensitive. For example patent is a definite intangible asset as it will expire after the time period for the patent is over (usually 20 years), however, a company’s brand name will remain throughout the company’s existence.
They are expected to last for more than 1 year and are usually held for production or supply of goods/services, rent to others, or for administrative purposes.
Examples of Intangible Assets
A list of examples of intangible assets are patent, licenses, brand name, logo, copyright, trademark, goodwill, other intellectual property etc.
They are not considered liquid assets and are challenging to sell in case of emergencies. Royalties, video games, mobile apps, music videos, YouTube/Instagram, etc. are some very common forms of such resources.
Short Quiz for Self-Evaluation
Some error has occured.
>Read Contingent Assets
For Accounting Practice