Tangible vs Intangible Assets

Tangible vs Intangible Assets

The distinction between physical assets (tangible) such as equipment, buildings, and inventory, and non-physical assets (intangible) such as patents, copyrights, and goodwill.

For example, a technology company’s balance sheet might show tangible assets including servers, office equipment, and buildings, alongside intangible assets like software patents, trademarks, and customer databases.

Tangible assets typically have physical substance and are depreciated over their useful lives, while intangible assets lack physical form and are amortized if they have finite lives. This distinction affects acquisition accounting, ongoing expense recognition, impairment testing, and financial statement presentation.