Intangible Assets
These are the assets which do not exist physically, but prove to be an asset for the company. These assets are valuable because they represent a potential revenue. Examples: An asset such as brand recognition has a great value for a company. Like coca-cola is a powerful brand with a high position in the market. The brand name ‘coca-cola’ in itself is enough for a revenue. Even the intellectual property of a company are intangible assets. These may include the patents, copyrights, etc.
Example
Suppose a company named –‘Ricky-star productions’ is at hike these days. Now , the brand name ‘Ricky-star’ is an asset. Also the songs of the singer Ricky, which are copyrights, are an asset. Now suppose Ricky gets his guitar tune patented, then this also proves to be an asset and that too intangible. Whenever, the company has to sell it’s rights or patents, it gets the revenue.
Types of Intangible Assets
These can be classified into two categories namely definite and indefinite assets.
Indefinite assets: These are the assets which remain with the company throughout the period, for which the company works or stays. Example: the brand recognition or the brand name ,as it has a life to live along with the company till the company stays live.
Definite assets: These assets, as the name suggests, have definite life i.e they have a fixed life span. Example can be the patents, copyrights etc. Suppose a company decides to work under some other company ,with a patent of five years, then it is said to be definite asset.
So, in all intangible assets ,although not physically exist but they are very profitable and important for a company , not only for it’s survival but also for it’s goodwill.
