Intangible assets are values that do not have a physical form

Intangible assets are values that have a certain value, but do not have physical incarnation. In fact, they are not physical, physical objects. There are many varieties of such assets.

In the modern understanding, intangible assets are those assets that have a certain legal status, are identified by the time of their appearance and availability, belong to private property, they need legal protection, they have a certain manifestation or proof of their existence.

Intangible assets are objects that are associated with various elements of activity:

• With technological patents, technical documentation and various know-how;
• With marketing in the form of brand names, trademarks, logos, trademarks and brands;
• With information processing: computer patented software and rights to it, templates for various integrated circuits, automated databases;
• With engineering: patents for products, designs, schemes and drawings, various documentation;
• With creativity: literary, musical, staged works, as well as copyright and publishing rights to them;
• With goodwill (prestige and business reputation of the firm);
• With the clientele of the company: contracts, purchase orders and good relationships with customers;
• With personnel: hiring agreements, qualified and trained personnel, arrangements with trade unions;
• With contracts: licensing agreements, profitable and successful contracts with suppliers, franchise agreements;
• With land: the right to water and air space and the development of various minerals.

Intangible assets also have the definition: assets that do not have a physical form, but are included in the balance sheet assets of the enterprise and require gradual depreciation during the period of their use.

Estimation of the value of intangible assets is a rather complex process, which has its own specifics. This type of assessment is very different from the evaluation of material forms of ownership. It is quite difficult to determine how much the impact and profitability of intangible assets. These assets allow enterprises to receive additional profits, increase sales and reduce costs.

When selling intangible assets, it is not the object itself that is realized, but the right to use it. The basis for recording on the balance sheet is the invoice issued to the buyer or the delivery note. If the sale of the intangible asset occurs, its residual value relates to other expenses and revenues. Intangible assets are assets whose turnover from sale is subject to VAT.

In the financial statements, intangible assets cease to be reflected in the event of their retirement for reasons of gratuitous transfer, sale, etc. Losses or revenues that arise upon the termination of the recognition of assets are reflected in the relevant report.