Intangible Asset


DEFINITION of 'Intangible Asset'

An asset that is not physical in nature. Corporate intellectual property (items such as patents, trademarks, copyrights, business methodologies), goodwill and brand recognition are all common intangible assets in today's marketplace. An intangible asset can be classified as either indefinite or definite depending on the specifics of that asset. A company brand name is considered to be an indefinite asset, as it stays with the company as long as the company continues operations. However, if a company enters a legal agreement to operate under another company's patent, with no plans of extending the agreement, it would have a limited life and would be classified as a definite asset.

To learn more about asset classes, check out "What is the difference between tangible and intangible assets?"


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BREAKING DOWN 'Intangible Asset'

While intangible assets don't have the obvious physical value of a factory or equipment, they can prove very valuable for a firm and can be critical to its long-term success or failure. For example, a company such as Coca-Cola wouldn't be nearly as successful were it not for the high value obtained through its brand-name recognition. Although brand recognition is not a physical asset you can see or touch, its positive effects on bottom-line profits can prove extremely valuable to firms such as Coca-Cola, whose brand strength drives global sales year after year.

  1. Nonmonetary Assets

    Assets in which the right to receive a fixed or determinable ...
  2. Alternative Asset

    Any non-traditional asset with potential economic value that ...
  3. Going-Concern Value

    The value of a company as an ongoing entity. This value differs ...
  4. Patent

    A government license that gives the holder exclusive rights to ...
  5. Tangible Asset

    Assets that have a physical form. Tangible assets include both ...
  6. Nonfinancial Asset

    An asset with a physical value such as real estate, equipment, ...
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  4. Is goodwill considered a form of capital asset?

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  5. Is intellectual property considered a form of capital asset within a company?

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  10. How do businesses determine if an asset may be impaired?

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  11. Why is work in progress (WIP) considered a current asset in accounting?

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  12. What are the differences between personal and business tangible net worth?

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  13. What is the difference between fixed assets and current assets?

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  14. Why is brand equity considered an intangible asset?

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  16. Can you realize capital gains on intangible property?

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  17. What is the average return on equity for a company in the railroads sector?

    Return on equity (ROE) measures the profitability of a corporation in relation to shareholders’ equity and indicates how ... Read Full Answer >>
  18. What types of companies have a high proportion of intangible assets?

    Several industries have companies with a high proportion of intangible assets. The highest percentages occur in the types ... Read Full Answer >>
  19. What kinds of events or circumstances will increase or decrease the proportion of ...

    An acquisition is one type of event which substantially increases the number and value of intangible assets that a company ... Read Full Answer >>
  20. How do intangible assets appear on a balance sheet?

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  21. What is the difference between tangible and intangible assets?

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  22. How does a customer base dictate goodwill?

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