Intangible assets

What is an intangible asset?

Intangible assets are those assets owned by a company that cannot be physically perceived. These, although they cannot be seen or touched due to their immaterial nature, still add value to the company.

They are considered active, since they generate economic performance for the company and they are part of their market value, for which they must be taken into account by the accounting of the organization in question.

Characteristics of an intangible asset

Among the characteristics of intangible assets we can highlight the following:

• They have no physical appearance.
• They are intangible assets such as privileges, competitive advantages and rights that are valuable, since they increase the income of a company.
• They are assets of gradual amortization during the time that they are in force.
• They are generally used for the supply of products and services, or for administrative purposes.
• In view of their intangible condition, it is very difficult to give them an accounting valuation.

Types of intangible assets

Intangible assets can be classified into assets of their own identity, incorporation, sale, legal and accounting life identifiable.

Of identity

Depending on whether they are identifiable or not:

Of incorporation

Those that are classified according to the method of incorporation into the organization:

• Acquired: franchises and concessions.
• Created by the organization: organization or development expenses.

Form of sale

According to your commercial destination:

• Commercial: May be sold separately, like brands.
• No comercial: advertising or development expenses.

Term or legal life

According to the standard of living you have:

• Limited: concessions or patents.
• Life: brands.

Accountingly identifiable

Depending on whether or not they can be identified by the organization's accounting:

• Identifiable: organizational expenses.
• Not identifiable: for example, the business key.

Examples of intangible assets

Here are some common examples of intangible assets:

Previously, intangible assets They were not included in the accounting books, but in view of their importance and the great contribution they make to some companies, they began to be considered and to have a proportional value.