Examples of intangible assets
/What is an Intangible Asset?
An intangible asset is a non-physical asset having a useful life greater than one year. These assets are generally recognized as part of an acquisition , where the acquirer is allowed to assign some portion of the purchase price to acquired intangible assets. Few internally-generated intangible assets can be recognized on an entity's balance sheet . Examples of intangible assets are noted below.
Marketing-Related Intangible Assets
Marketing-related intangible assets are associated with the marketing activities of a business. The cost to acquire a trademark or an internet domain name can be recognized as an asset; all other assets in this classification can only be recognized as assets as a result of an acquisition.
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Trademarks . These are legally protected symbols, names, or logos that identify and distinguish a company’s products or services from competitors.
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Newspaper mastheads . These are the recognizable titles or nameplates of newspapers that represent brand identity and editorial reputation.
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Internet domain names . These are unique web addresses that serve as digital brand identifiers and access points for a company’s online presence.
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Noncompetition agreements . These are contractual obligations that restrict individuals or entities from engaging in competing activities, protecting a company’s market position and customer relationships.
Customer-Related Intangible Assets
Customer-related intangible assets are associated with the customers acquired by a business. These costs can only be recognized as assets as a result of an acquisition.
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Customer lists
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Order backlog
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Customer relationships
Artistic-Related Intangible Assets
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Performance events
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Literary works
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Musical works
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Pictures
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Motion pictures and television programs
Related AccountingTools Courses
Contract-Based Intangible Asset
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Licensing agreements
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Service contracts
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Lease agreements
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Franchise agreements
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Broadcast rights
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Employment contracts
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Use rights (such as drilling rights or water rights)
Technology-Based Intangible Asset
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Patented technology
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Computer software
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Trade secrets (such as secret formulas and recipes)
Accounting for Intangible Assets
Intangible assets may be recorded if they are acquired, but not if they are developed in-house. If acquired, an expenditure can only be recorded as an asset if it is expected to have a useful life of at least one year. Otherwise, it must be recorded at once as an expense . For example, if a business pays a graphic artist to design a logo for it, then the artist’s fee can be recorded as an intangible asset. If the logo had been designed in-house by a staff person, it would not be possible to record an asset.
