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.

Related Courses

Accounting for Intangible Assets 
Fixed Asset Accounting 
How to Audit Fixed Assets