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Intangible Asset Notes

This document defines intangible assets as non-physical assets with a useful life greater than one year. Intangible assets are generally recognized as part of an acquisition and include things like trademarks, patents, software, customer lists, contracts, and artistic works. Few internally-generated intangible assets can be recognized on a balance sheet. Intangible assets may be recorded if acquired from an external party, but not if developed internally.

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48 views

Intangible Asset Notes

This document defines intangible assets as non-physical assets with a useful life greater than one year. Intangible assets are generally recognized as part of an acquisition and include things like trademarks, patents, software, customer lists, contracts, and artistic works. Few internally-generated intangible assets can be recognized on a balance sheet. Intangible assets may be recorded if acquired from an external party, but not if developed internally.

Uploaded by

Jenn Dajao
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Examples of intangible assets  Service contracts

An intangible asset is a non-physical asset


having a useful life greater than one year.  Lease agreements
These assets are generally recognized as part
 Franchise agreements
of an acquisition, where the acquirer is
allowed to assign some portion of the  Broadcast rights
purchase price to acquired intangible assets.
Few internally-generated intangible assets  Employment contracts
can be recognized on an entity's balance
sheet. Examples of intangible assets are  Use rights (such as drilling rights or
noted below. Marketing-Related Intangible water rights)
Assets
Technology-Based Intangible Asset

 Trademarks
 Patented technology
 Newspaper mastheads
 Computer software
 Internet domain names
 Trade secrets (such as secret
 Noncompetition agreements formulas and recipes)
Customer-Related Intangible Assets Accounting for Intangible Assets

 Customer lists Intangible assets may be recorded if they are

 Order backlog acquired, but not if they are developed in-


house. If acquired, an expenditure can only be
 Customer relationships
recorded as an asset if it is expected to have
Artistic-Related Intangible Assets
a useful life of at least one year. Otherwise, it
must be recorded at once as an expense. For
 Performance events
example, if a business pays a graphic artist to
 Literary works design a logo for it, then the artist’s fee can

 Musical works be recorded as an intangible asset. If the logo


had been designed in-house by a staff
 Pictures
person, it would not be possible to record an
 Motion pictures and television asset.
programs

Contract-Based Intangible Asset

 Licensing agreements

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