Intangible assets are values that have a certain value, but do not have a physical embodiment. In fact, they are not material, physical objects. There are quite a few varieties of such assets.
In the modern sense, intangible assets are those assets that have a certain legal status, are identified by the time of appearance and availability, belong to private property, need legal protection, have a certain manifestation or proof of their existence.
Intangible assets are objects that are associated with various elements of activity:
- with technology patents, technical documentation and various know-how;
- with marketing in the form of brand names, trademarks, logos, trademarks and brands;
- with information processing: computer proprietary software and rights thereto, templates for various integrated circuits, automated databases;
- with engineering: patents forproducts, projects, diagrams and drawings, various documentation;
- with creativity: literary, musical, staged works, as well as copyright and publishing rights to them;
- with goodwill (prestige and business reputation of the firm);
- with the company's clientele: contracts, purchase orders and good customer relationships;
- with personnel: employment contracts, qualified and trained personnel, agreements with trade unions;
- with contracts: license agreements, profitable and successful contracts with suppliers, franchise agreements;
- with land: rights to water and air space and the development of various minerals.
Intangible assets also have the following definition: assets that do not have a physical form, but are included in the assets of the enterprise's balance sheet and require gradual depreciation during their useful life.
Assessing the value of intangible assets is a rather complex process that has its own specifics. This type of assessment is very different from the assessment of material forms of ownership. It can be quite difficult to determine how big the impact and profitability of intangible assets is. These assets allow businesses to generate additional profits, increase sales and reduce costs.
When selling intangible assets, it is not the object itself that is sold, but the rights to use it. The basis for the entry on the balance sheetis an invoice or waybill issued to the buyer (acceptance certificate). If the intangible asset itself is sold, its residual value is included in other expenses and income. Intangible assets are objects whose sale turnover is subject to VAT.
In financial statements, intangible assets are no longer reflected in the event of their disposal for reasons of gratuitous transfer, sale, etc. Losses or income that arise when assets are derecognised are reflected in the corresponding report.
