Intangible assets

We'll be exploring an often misunderstood, but increasingly vital asset category, intangible assets. Unlike tangible assets such as land, machinery or vehicles, intangible assets are non physical resources that can drive significant value for organizations. Examples include brand names, patents, trademarks, copyrights, software, and customer lists. In both United Kingdom and United States accounting standards, intangible assets must be identifiable, controlled by the entity, and must provide future economic benefits. Although brands or patents are not physically tangible, these assets often make up a substantial part of a company's value, particularly in knowledge driven and technology rich firms. Intangible assets can be grouped into several categories, marketing related assets, such as brands, trademarks and Internet domains, customer related assets like client lists or contracts, technology based assets, for example, patents and proprietary software and artistic or contract based assets. In the digital and service oriented economy, intangibles have grown to represent a huge proportion of company value, often more than tangible assets. For instance, total market value of many leading technology companies is far greater than the recorded value of their physical assets, thanks largely to the power of their brands, intellectual property, and organizational know how. Accounting for intangible assets presents unique challenges,