Intellectual property

Intellectual property is a concept or idea that has commercial value and can be protected with a copyright, patent, or trademark. A business may go to great lengths to obtain legal protections for its intellectual property, and to take legal action to pursue anyone using these assets without permission. The value of intellectual property is probably not stated in a company’s balance sheet, since accounting conventions limit the situations in which these assets can be recorded. Instead, the value of intellectual property is likely to be reflected in the market value of a company’s shares, as long as investors are cognizant of a firm’s intellectual property. Examples of intellectual property are:

  • Brand names
  • Formulas
  • Inventions
  • Literature
  • Music
  • Software

Related Courses

Fixed Asset Accounting 
The Balance Sheet