- Asset Accounts
- Assets in Accounting
- Total Assets
- Total Assets Formula
- Fixed Assets
- Fully Depreciated Assets
- List of Assets
- Types of Assets
- Examples of Assets
- Net Assets
- Book Value of Asset
- Fixed Assets Accounting
- Net Asset Formula
- Assets Formula
- Net Fixed Assets
- Property Plant and Equipment (PP&E)
- Cash and Cash Equivalents | Examples, List & Top Differences
- Cash Equivalents
- Restricted Cash
- Inventories List
- 3 Types of Inventory | Raw Material | WIP | Finished Goods
- WIP Inventory (Work-in-Progress)
- Raw Material Inventory
- Lower of Cost or Market
- Inventory Write-Down
- Periodic Inventory System
- Ending Inventory Formula
- Average Inventory Formula
- Closing Stock
- Carrying Amount
- Carrying Value
- Inventory vs Stock
- Is Inventory a Current Asset?
- Current Assets
- Short Term Investments on Balance Sheet
- Current Assets vs Non-Current Assets
- Current Assets Examples
- Current Assets List
- Current Assets Formula
- Other Current Assets
- Short Term Assets
- Assets Revaluation
- FIFO vs LIFO
- First In First Out (FIFO)
- Last in First Out (LIFO)
- LIFO Reserve
- LIFO Liquidation
- Non-Current Assets
- Accounts Receivables? | Definition, Accounting Examples
- Is Account Receivable - An Asset or Liability?
- Accounts Receivable Examples
- Accounts Receivable Process
- Is Accounts Receivable an Asset?
- Accounts Receivable - Debit or Credit?
- Accounts Receivables Factoring
- Recourse in Factoring
- Accounts Receivable Financing
- Accounts Receivable Journal Entry
- Net Realizable Value Formula
- Trade Receivables
- Net Realizable Value (NRV)
- Allowance for Doubtful Accounts
- Accrued Revenue
- Accrued Revenue Examples
- Deferred Revenue Expenditure
- Deferred Revenue Examples
- Liquid Assets
- Liquid Assets Examples
- Financial Assets
- Financial Assets Examples
- Financial Assets Types
- Quick Assets
- Marketable Securities on the Balance Sheet | Top Examples
- Marketable Securities Examples
- Non-Marketable Securities
- Trading Securities in Balance Sheet
- Prepaid Expenses
- Prepaid Expense Examples
- Prepaid Insurance
- Intangible Assets List
- Tangible vs Intangible Assets
- Net Tangible Assets
- Tangible vs Intangible
- Contingent Asset
- Tangible Assets
- Deferred Tax
- Deferred Income Tax
- Deferred Tax Assets
- Capital Expenditure (Capex)
- Capex Calculation
- Capital Expenditure Examples
- Capex vs Opex
- Salvage Value
- Residual Value
- Working Capital Management Importance
- Working Capital Examples
- Working Capital Loan
- Fixed Capital vs Working Capital | Top 8 Differences (Infographics)
- Impariment of Assets
- Goodwill Formula
- Goodwill Amortization
- Goodwill Impairment Test
- Intangible Assets
- Intangible Assets Examples
- Negative Goodwill
- Goodwill Valuation
- Capitalized Interest
- Accounting Basics (80+)
- Bookkeeping (52+)
- Balance Sheet (30+)
- Liabilities (68+)
- Shareholders Equity (91+)
- Income Statement (158+)
- Cash Flow Statement (17+)
- Accounting Careers (27+)
- Accounting Books (8+)
- Budgeting in Finance (31+)
Examples of Intangible Assets
The following Intangible Assets example
An intangible asset is something which does not have physical evidence. It usually has a useful life for more than a year. They have significant commercial value. Intangible assets are recorded in the asset section of the balance sheet. When we amortize intangible assets, then the amortized amount needs to be written in the income statement. Intangible assets are not tax deductible hence companies amortize them over their useful life in order to reduce the tax liabilities.
Common Examples of intangible assets include –
Intangible Assets Example#1 – Goodwill
Goodwill happens when one company takes over another company above its fair market value. For example, if company A takes over company B for an amount which is more than the value is of company B then the amount that is leftover is recorded as goodwill in the balance sheet of Company A in the section of Current Assets.
Company A purchases all of the outstanding stock of B for ₹ 5, 000, 00. On the acquisition date, Company A lists the goodwill as a current asset in the balance sheet:
The balance sheet of Company B is as follows:
Company A wouldn’t consider goodwill as a real asset purchased by it in the Balance Sheet.
The fair value of the Assets purchased by company A is 200000 + 500000 – 500000 = 200000. We do not include goodwill as it is not a real asset to be considered.
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As Company A has paid an amount of ₹ 5, 000, 00 for its outstanding stocks so company A has to show ₹ 300000 as goodwill in the balance sheet.
Intangible Assets Example#2 – Patents
A patent is a right given to an inventor by a sovereign authority. This grant will eventually provide the patent the rights to the design for a stipulated time frame in return of disclosure of the invention.
US patents are valid for twenty years. Pharmaceutical companies invest a lot in research and development, therefore, they will always want the patent to protect duplication.
The U.S. Patent and Trademark Office majorly takes care of three types of patent applications:
- Plant Patents.
Utility patents cover anyone who invents a new and useful process. For example machine. A design patent is an original design for a manufactured product.
Plant patents will apply to anyone who discovers a plant which is capable of reproduction.
Intangible Assets Example#3 – Copyrights
Copyrights give the right to creative work in order to avoid duplication. Copyright registration provides rights on how and in what conditions the material should be allowed to be used.
Steps to Copyright your Product in the US
- First, determine whether the product that I want to register is eligible for copyright or not. The product must be in a tangible form.
- Then we need to identify the appropriate agency to register the product with. The U.S. Copyright Office/ Writers Guild of America are the copyright office with which the product can be registered.
- Then we need to save the work in an appropriate format if we plan to register it online.
- Lastly, we need to go to the U.S. Copyright Office to register the work.
Intangible Assets Example#4 – Franchises/ Licenses
When a franchisor decides to sell their trademarked product, the franchise gets the right to use it. For example food chains.T he franchisee gets the rights to capitalize on their already established product.
Like the other intangible assets, the franchise rights are put down in the long term asset section of the balance sheet. The amount is equal to the amount with which the initial rights were bought.
As we can see above, the Franchise rights are written down in the asset section of the balance sheet.
Intangible assets are not physical in nature but they create value for the business enterprises. Intangible assets like said has a useful life. The intangible asset is recorded in the balance sheet in the current asset section and is amortized over the useful life of the product.
This has been a guide to Intangible Assets Examples. Here we provide the list of most common intangible assets examples including goodwill, patents, copyrights, franchises. You may learn more about accounting from the following articles –