Intangible Assets
Non-physical assets that provide long-term economic benefits, including patents, trademarks, copyrights, and goodwill, requiring special valuation and accounting treatment.
Intangible Assets
Non-physical assets that provide economic benefits over multiple periods, such as patents, trademarks, copyrights, and goodwill.
For example, a pharmaceutical company’s valuable patent on a drug formula would be recorded as an intangible asset and amortized over its legal life or useful life, whichever is shorter.
Intangible assets are increasingly important in knowledge-based economies but present valuation challenges due to their unique and non-physical nature. They are recorded at acquisition cost if purchased externally, while internally generated intangibles are generally expensed rather than capitalized, with limited exceptions for specific development costs.