What Is Meant Be the Term “Intangible Asset?”
What is meant be the term “intangible asset?”
Intangible assets are defined as identifiable non-monetary assets that cannot not be seen, touched or physically measured, which are created through time and/or effort and that are identifiable as a separate asset. Corporate intellectual property (items such as patents, trademarks, copyrights, business methodologies), goodwill and brand recognition are all common intangible assets in today’s marketplace.
Intangible assets have 3 critical attributes which are:
• Indetifiability. This means that they must be capable of being separated from the rest of the company and can be sold, licensed, rented or exchanged either individually or together with a related item or the intangible asset must be identifiable because it arises from contractual or legal rights even if those rights are not separable from the business.
• Control. Intangible asset is a resource that is controlled by the entity as a result of past events (for example, purchase or self-creation)
• Future economic benefits. Intangible asset is a resource from which future economic benefits (inflow of cash or other assets) are expected.
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 assets.
Accounting Requirements of IAS 38 Intangible Assets for Brands
The objective of this Standard is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another Standard. This Standard requires an entity to recognise an intangible asset if, and only if, specified criteria are met. The Standard also specifies how to
Intangible assets are defined as identifiable non-monetary assets that cannot not be seen, touched or physically measured, which are created through time and/or effort and that are identifiable as a separate asset. Corporate intellectual property (items such as patents, trademarks, copyrights, business methodologies), goodwill and brand recognition are all common intangible assets in today’s marketplace.
Intangible assets have 3 critical attributes which are:
• Indetifiability. This means that they must be capable of being separated from the rest of the company and can be sold, licensed, rented or exchanged either individually or together with a related item or the intangible asset must be identifiable because it arises from contractual or legal rights even if those rights are not separable from the business.
• Control. Intangible asset is a resource that is controlled by the entity as a result of past events (for example, purchase or self-creation)
• Future economic benefits. Intangible asset is a resource from which future economic benefits (inflow of cash or other assets) are expected.
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 assets.
Accounting Requirements of IAS 38 Intangible Assets for Brands
The objective of this Standard is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another Standard. This Standard requires an entity to recognise an intangible asset if, and only if, specified criteria are met. The Standard also specifies how to