Intangible assets

Intangible assets, therefore, are those intangible assets that the company has. These do not have a physical presence, but they do present a value that can be measured. In this sense, we can highlight intangible assets such as working hours, a trademark, a patent, the provision of services, obligations to third parties, among other matters.

Intangible assets are called intangible assets.

In the same way, non-physical elements are called intangible assets, which make up the traditions of the peoples, so they are part of their identity.

Characteristics of intangible assets

Among the characteristics of intangible assets, the following should be highlighted:

• They have no image, no physical presence.
• They are goods that have value, so they increase the value of the company.
• There are defined valuation methods to calculate its market value.
• Like brands, they help the business earn revenue.
• They are usually used in the production or supply of goods and services.
• Like the Know How, they are included in the assets of the company.

Types of intangible assets

Intangible assets, in their classification, we can classify them as follows:

Depending on your identity, the assets can be:

• Identifiable or unidentifiable.

Based on their acquisition, they can be:

• Acquired, or bought, or created by the organization.

Depending on the way in which your sale is made, they can be:

• Commercial or non-commercial.

Based on their legal life, they can be:

• Limited or perpetual.

Depending on their accounting identification, they can be:

• Identifiable or unidentifiable.

Methods of valuation of trademarks and other intangible assets

Some methods of valuation of brands and intangibles are:

• The value of the company (shares plus financial debt).
• Difference between the market value and the theoretical book value of the firm’s shares.
• The difference between the value of the company that owns the brand and the value of another firm that sells non-branded products (white label). This difference can be made based on:
  • Difference in product prices.
  • Value of the extra sales volume.
  • Difference of the ratios (Capitalization / sales).
• The present value of the company’s free cash flow minus the assets used for the required profitability.

Examples of intangible assets

On a daily basis, we find endless intangible assets that, even though they are, are not identified by society as assets.

In this sense, our own knowledge is the main intangible asset that, since we are born, we have acquired over time. However, in the same way, we come across other intangible assets without realizing it. Thus, when we ask our parents for Nike shoes, the brand we are buying, and for which we pay a higher price, is an intangible asset.

In this line, the clients that we have in our company, as well as the collection rights that we have, are an intangible asset. Also, when we put a song in our store, we have to pay for the use of it. This is because the song, in the same way, has copyright rights that are considered an intangible asset.