Examples of intangible assets
/An intangible asset is a non-physical asset having a useful life greater than one year. These assets are generally recognized as part of an acquisition, where the acquirer is allowed to assign some portion of the purchase price to acquired intangible assets. Few internally-generated intangible assets can be recognized on an entity's balance sheet. Examples of intangible assets are noted below.
Marketing-Related Intangible Assets
Marketing-related intangible assets are associated with the marketing activities of a business. The cost to acquire a trademark or an internet domain name can be recognized as an asset; all other assets in this classification can only be recognized as assets as a result of an acquisition.
Trademarks
Newspaper mastheads
Internet domain names
Noncompetition agreements
Customer-Related Intangible Assets
Customer-related intangible assets are associated with the customers acquired by a business. These costs can only be recognized as assets as a result of an acquisition.
Customer lists
Order backlog
Customer relationships
Artistic-Related Intangible Assets
Performance events
Literary works
Musical works
Pictures
Motion pictures and television programs
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Contract-Based Intangible Asset
Licensing agreements
Service contracts
Lease agreements
Franchise agreements
Broadcast rights
Employment contracts
Use rights (such as drilling rights or water rights)
Technology-Based Intangible Asset
Patented technology
Computer software
Trade secrets (such as secret formulas and recipes)
Accounting for Intangible Assets
Intangible assets may be recorded if they are acquired, but not if they are developed in-house. If acquired, an expenditure can only be recorded as an asset if it is expected to have a useful life of at least one year. Otherwise, it must be recorded at once as an expense. For example, if a business pays a graphic artist to design a logo for it, then the artist’s fee can be recorded as an intangible asset. If the logo had been designed in-house by a staff person, it would not be possible to record an asset.