intangible assets

Meaning

This term refers to valuable, non-physical assets owned by a company, such as intellectual property, patents, trademarks, brand recognition, and goodwill. Unlike physical (tangible) assets like buildings or machinery, these assets have long-term value but cannot be physically touched.

Examples

• Brand reputation and customer loyalty are crucial intangible assets for any modern business.

  Brand reputation and customer loyalty are crucial intangible assets for any modern business.

• The company's valuation soared due to its extensive portfolio of patents and other intangible assets.

  The company's valuation soared due to its extensive portfolio of patents and other intangible assets.

• During the acquisition, the auditors spent weeks assessing the value of the firm's intangible assets.

  During the acquisition, the auditors spent weeks assessing the value of the firm's intangible assets.

• While machinery is a physical asset, proprietary software is classified as an intangible asset.

  While machinery is a physical asset, proprietary software is classified as an intangible asset.

• Accounting standards require companies to regularly evaluate their intangible assets for impairment.

  Accounting standards require companies to regularly evaluate their intangible assets for impairment.

Common Mistakes

• ✗ The company has many untangible assets like patents.

  ✓ The company has many intangible assets like patents.

  The correct prefix is 'in-', making it 'intangible,' not 'untangible.'

• ✗ We need to calculate the value of our untouchable assets.

  ✓ We need to calculate the value of our intangible assets.

  'Untouchable' means something that cannot be criticized, affected, or reached (often with a social or legal connotation). In business and accounting, the correct term for non-physical assets is 'intangible.'

Related Expressions

Practice

• Patents, trademarks, and brand equity are all examples of ___.

  💡 valuable assets that lack physical substance

  Show answer

  intangible assets

• Although physical equipment is vital, our company's true value lies in its ___.

  💡 non-physical business assets like brand reputation

  Show answer

  intangible assets