Intangible asset

An intangible asset is a non-physical asset having a useful life greater than one year. If an intangible asset is determined to have a useful life, then its book value is amortized over that useful life. If at any point there is judged to be a decline in the remaining value of an intangible asset below its carrying amount, then the difference is recognized as an impairment expense in the current period; that is, the impairment charge is not spread out over a number of periods.

Examples of intangible assets are:

  • Marketing-related intangible assets
    • Trademarks
    • Newspaper mastheads
    • Internet domain names
    • Noncompetition agreements
  • Customer-related intangible assets
    • Customer lists
    • Order backlog
    • Customer relationships
  • Artistic-related intangible assets
    • Performance events
    • Literary works
    • Musical works
    • Pictures
    • Motion pictures and television programs
  • Contract-based intangible assets
    • Licensing agreements
    • Service contracts
    • Lease agreements
    • Franchise agreements
    • Broadcast rights
    • Employment contracts
    • Use rights (such as drilling rights or water rights)
  • Technology-based intangible assets
    • Patented technology
    • Computer software
    • Trade secrets (such as secret formulas and recipes)

The other type of long-term asset is a tangible fixed asset, such as a vehicle, office equipment, or machinery.