An intangible asset is an asset that you cannot touch, since it lacks physical substance. Accountants record intangible assets at their cost when they are acquired. Some intangible assets have a limited life and are amortized to expense over that life. Other intangible assets have an unlimited ...
Define the term intangible asset. What is an intangible asset? Describe the Reporting of Plant and Intangible Assets. Give an example. What is the depreciation "equivalent" for non-plant assets? What are the three characteristics that qualify an asset as a plant asset? Expai...
What Is an Intangible Asset? Definition and Type What Is Accounts Payable? How the AP Process Works Accounts receivable FAQ What does it mean to be an account receivable? An account receivable refers to the money owed to a business by its customers for goods or services provided on credit. ...
You only record an intangible asset if your business buys or acquires it. Also, the intangible asset must have an identifiable value and a long-term lifespan. You do not record intangible assets that you create within your business. For example, your logo is an intangible asset that holds ...
In accounting, goodwill is an intangible asset associated with a business combination. Goodwill is recorded when a company acquires (purchases) another company and the purchase price is greater than 1) the fair value of the identifiable tangible and intangible assets acquired, minus 2) the liabili...
Anassetis any resource of value, tangible or intangible, that is owned by an individual, a company, or a government with the expectation that it will provide an economic benefit. Key Takeaways Assets are any resource of value that is owned by an individual, business, or government. ...
Example of intangible assets in action Example: Technology Company Acquisition A large technology company acquires a smaller software firm for $100 million. The fair value of the smaller firm’s tangible assets (such as equipment and office space) is $20 million, and its identifiable intangible as...
One of the more common approaches is to use a baseline number and determine how much of the company's current profit is coming from the intangible asset. For example, the hypothetical accountant from the previous example might determine what most fast food joints make on hamburgers and compare ...
Intangible assets have no recordedbook value. Because of this, when a company is purchased, the purchase price is above the book value of assets on thebalance sheet. The purchasing company records the premium paid as an intangible asset on its balance sheet.4There are three common ways that ...
Since brand equity is an intangible asset, as is a company's intellectual property and goodwill, it cannot be easily accounted for on a company's financial statements. However, a recognizable brand name can still create significant value for a company. Investing in the quality of the prod...