*** Notice at top for first time visitors ***

* * * * *    piglix project (code-name) Launch Promotions    * * * * *

  • Learn more! ! if you are a bone fide Higher Education establishment and would like to learn how the piglix project may be your answer to the challenges of 'lecture room' replacement strategies, use our feedback page now to tell us about your needs and have someone contact you to explain your options and possibilities.

Intangible assets

An intangible asset is an asset that lacks physical substance (unlike physical assets such as machinery and buildings) and usually is very hard to evaluate. It includes patents, copyrights, franchises, goodwill, trademarks, trade names, the general interpretation also includes software and other intangible computer based assets. Contrary to other assets, they generally—though not necessarily—suffer from typical market failures of non-rivalry and non-excludability.

Intangible assets have been argued to be one possible contributor to the disparity between company value as per their accounting records, and company value as per their market capitalization. Considering this argument, it is important to understand what an intangible asset truly is in the eyes of an accountant. A number of attempts have been made to define intangible assets:

The lack of physical substance would therefore seem to be a defining characteristic of an intangible asset. Both the IASB and FASB definitions specifically preclude monetary assets in their definition of an intangible asset. This is necessary in order to avoid the classification of items such as accounts receivable, derivatives and cash in the bank as an intangible asset. IAS 38 contains examples of intangible assets, including: computer software, copyright and patents.

R&D is considered as one among several other intangible assets (e.g., about 16 percent of all intangible assets in the US ), even if most countries treat R&D as current expenses for both legal and tax purposes. While most countries report some intangibles in their National Income and Product Accounts (NIPA), no country has included a comprehensive measure of intangible assets. Yet, economists recognize the growing contribution of intangible assets in long-term GDP growth.

IAS 38 requires any project that results in the generation of a resource to the entity be classified into two phases: a research phase, and a development phase.

Research is defined as "the original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding. For example, a company can carry a research on one of its products which it will use in the entity of which results in future economic income.

Development is defined as "the application of research findings to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems, or services, before the start of commercial production or use."


Social Distancing Order In Force!

Don't forget! that your welfare and that of all your friends and colleagues here is of primary concern and a distance of six feet (1.8m) minimum is required at all times.