What are Intangible Assets?

3/26/2016

Accounting Basics

Patents, copyrights, trademarks, and goodwill are long-lived assets that are used in the operations of a business and are not held for sale. These assets are called intangible assets because they do not exist physically.

The accounting for intangible assets is similar to that for fixed assets. The major issues are:

Determining the initial cost
Determining the amortization, which is the amount of cost to transfer to expense

Amortization results from the passage of time or a decline in the usefulness of the intangible asset.

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