QandAs: Legal

What is an Intangible Asset?

Answer:
An intangible asset is an item of

value that can’t be physically touched. Corporate intellectual property such as brand names, trademarks, trade secrets, copyrights, and patents are all considered to be common intangible assets.

The two main types of intangible assets are “legal” intangibles and “competitive” intangibles. Legal tangibles are such items as trade secrets and copyrights. Collaboration, structural, and knowledge activities are considered competitive intangibles.

Depending on the intangible assets, some are allowed to be sold separate from a business while certain other ones can’t be sold. A company’s assessing officer should be aware of the types of intangible assets that the business may own so that properties may be valued appropriately.

Although intangible assets don’t have physical value they can prove extremely valuable to a company. For instance, brand name recognition can be an important factor as it may affect a company’s sales revenue.