Intangible Assets

Question 1

What are different intangible assets and their types:

Answer 1

→ Intangible will include different items Like Goodwill, knowledge, trademarks, copyrights, patents, computer software etc.

→ Intangible assets can be divided into three parts depending on the nature of assets or expenses:

1. Capitalized Expenditure
2. Normal Assets
3. Exclusivity

Question 2

What are different intangible assets and their types:

Answer 2

→ Intangible will include different items Like Goodwill, knowledge, trademarks, copyrights, patents, computer software etc.

→ Intangible assets can be divided into three parts depending on the nature of assets or expenses:

1. Capitalized Expenditure
2. Normal Assets
3. Exclusivity

Question 3

what is goodwill ?

Answer 3

Goodwill appears on a company’s balance sheet as an intangible asset, typically in the long-team asset creation. It represents the premium paid over four value of the identifiable net assets when a company acquires another.

→ ** Goodwill reflects the value of intangible factors like boand reputation, customer relationships, intellectual property and employee expertise.**

→ . Goodwill is tested for impariment annually or whenever there is an indication that it is Impaired.
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Question 4

what is capitalized Expenditure?

Answer 4

These include items that won’t reap direct economic benefit in the future and are just Capitalized expenditure. E.g. Goodwill, one-time fees etc.

→ According to accounting rules, companies have a choice where they can show an outgo as an expense in a single year, or else show it as an asset and depreciate it over few years.

** If a company has spent a large sum of money on an ad or brand campaign two years back and they assume that the benefits will accrue over the next three years. So the company can capitalize its expenses and show one-third of the total expenses in every financial year.**

Question 5

What is exclusivity?

Answer 5

These include items like Patents, Trademarks etc. that provide exclusivity to the company.

In many cases these patents, copyrights, etc. may allow company to charge higher prices and make additional profits. Most of the value of such company like Pharma companies is such assets that provide exclusivity.

Question 6

What are Normal Assets ?

Answer 6

Normal assets include all other intangible assets that provide economic benefits to the company. For eg. Ads, software etc.

Question 7

How do you access the value of intangible assets?

Answer 7

If a company has most assets that provide exclusivity, to the business those assets are most valuable.

Assets that have no future benefit are least valuable.