Intangible Assets refer to non-physical assets that have value due to the rights and privileges they confer to a business. These assets are not tangible in nature, meaning they cannot be touched or physically measured.
Common examples of intangible assets include:
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Patents – Exclusive rights granted for an invention, allowing the holder to manufacture, use, or sell the invention for a certain period.
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Trademarks – Recognizable signs, symbols, or expressions that distinguish products or services of a business from others, providing brand identity.
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Copyrights – Legal rights that grant the creator of original works exclusive control over the use and distribution of that work, typically for a specific duration.
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Goodwill – An intangible asset arising when a company acquires another company, reflecting the value of the acquired company’s brand, customer relationships, and employee relations, beyond the value of its tangible assets.
Intangible assets are typically recorded on a company’s balance sheet and can be subject to amortization over their useful life, except for goodwill, which is tested for impairment rather than amortized.
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