Intangible Benefits Flashcards
What are the main differences between tangible and intangible benefits in decision-making?
Tangible benefits are quantifiable in monetary terms and easier to identify, while intangible benefits cannot be measured in monetary terms, like customer satisfaction. Both are useful for decision-making.
What are three key characteristics of intangible benefits in accounting?
1) Non-monetary in nature
2) Difficult to measure, and
3) Typically not recorded on financial statements unless tied to an identifiable intangible asset
Can you list three examples of intangible benefits?
improved brand reputation
enhanced employee engagement
increased customer loyalty
How do tangible and intangible benefits complement each other?
Tangible benefits provide measurable outcomes, while intangible benefits add qualitative value that can indirectly lead to additional tangible gains over time.
How do automated systems contribute to intangible benefits?
They produce higher-quality products, leading to more satisfied customers, which results in higher revenue and profits.
How should organizations approach measuring intangible benefits?
Organizations should set measurable values for intangible benefits to support cost-benefit analyses and decision-making frameworks.
How can a positive NPV indicate intangible benefits?
A positive NPV (>1) suggests potential returns on investment, which might include increased revenue and improved efficiency as intangible benefits.
What are some indirect intangible benefits associated with automation and positive NPV?
Increased productivity
customer satisfaction
efficiency
reduced waste
improved quality.
What types of decisions aim to produce intangible benefits?
Decisions such as investing in employee development, brand management, technology upgrades, improving customer experience, and CSR initiatives.
