Intangible Assets

Long-term assets that have no physical substance but have a value based on rights or advantages accruing to the owner.

The purchase of an intangible asset should be treated as a capital expenditure and recorded at acquisition cost, which in turn should be amortized over the useful life of the asset. Research and development costs are treated as revenue expenditures and charged as expenses in the periods expenditure. Software costs are treated as research and development costs and expensed until a feasible working program is developed, after which time the costs may be capitalized and amortized over a reasonable estimated life. Goodwill is the excess of the amount paid for the purchase of a business over the fair market value of the net assets and is usually related to the superior earning potential of the business. It should be recorded only if paid for in connection with the purchase of a business.

• Brand Name
• Copyright
• Franchise
• Leasehold
• Leasehold Improvements
• License
• Patent
• Trademark