Intangible assets are values that have a certain value, but do not have physical embodiment. In fact, they are not material, physical objects. There are many varieties of such assets.
In the modern sense, intangible assets are those assets that have a certain legal status, are identified by the time of their appearance and availability, belong to private property, need legal protection, have a certain manifestation or proof of their existence.
Intangible assets are objects that are associated with various elements of activity:
- with technological patents, technical documentation and various know-how;
- with marketing in the form of brand names, trademarks, logos, trademarks and brands;
- with information processing: computer proprietary software and rights to it, templates for various integrated circuits, automated databases;
- with engineering: patents for products, projects, schemes and drawings, various documentation;
- with creativity: literary, musical, staged works, as well as copyrights and publishing rights to them;
- with goodwill (prestige and business reputation of the company);
- with the clientele of the company: contracts, purchase orders and good relationships with customers;
- with personnel: employment contracts, qualified and trained personnel, agreements with trade unions;
- with contracts: licensing agreements, profitable and successful contracts with suppliers, franchise agreements;
- with land: rights to water and air space and the development of various minerals.
Intangible assets also have a definition: assets that do not have a physical form, but are included in the assets of the balance sheet of the enterprise and requiring gradual depreciation during the period of use.
Valuation of intangible assets is a rather complex process, which has its own specifics. This type of valuation is very different from the valuation of material forms of ownership. It is quite difficult to determine how large the influence and profitability of intangible assets is. These assets allow enterprises to earn additional profits, increase sales and reduce costs.
When selling intangible assets, not the object itself is realized, but the right to use it. The basis for recording on the balance sheet is the invoice or invoice issued to the buyer (delivery-acceptance certificate). If the intangible asset itself is being sold, its residual value relates to other expenses and income. Intangible assets are objects whose sales turnover is subject to VAT.
Intangible assets cease to be reflected in financial statements if they are disposed of for reasons of free transfer, sale, etc. Losses or revenues that arise from the derecognition of assets are reflected in the corresponding report.