Intangible assets consist of items that are not tangible or in other words, are not able to be touched or seen even though money may have been paid to purchase them. Some common examples include Goodwill, Patents, Copyrights, Trademarks, Organization Costs, and Loan Fees. These intangible assets can be developed over a period of time by building up customer lists or by investing money into them or they can be purchased from another individual or entity.
Types of intangible assets:
1. Artistic-related: copyrights (photos, videos, audio materials) 2. Consumer-related: customer lists, contractual customer relationships, etc. 3. Contract-related: franchises, licensing agreements, broadcast rights, construction permits, exploration permits, import and export permits, service contracts, etc. 4. Goodwill (identified only with a business as a whole) 5. Market-related: trademarks, brand names, internet domain names, magazine mastheads, etc. 6. Technology-related: patents, trade secrets, computer programs, product formulas, etc.
This category of assets is a diverse group that encompasses any long-lasting asset that does not match in any of the groups described above. This section might comprise assets as long-standing receivables (from clients or associated organizations) and long-standing prepaid insurance premiums, deferred charge (i.e. deferred tax asset) etc.
The systematic write- off to expense of the cost of an intangible asset over the periods of its economic usefulness. OR
Installment loan in which the monthly payments are applied first toward reducing the interest balance, and any remaining sum towards the principal balance. As the loan is paid off, a progressively larger portion of the payments goes toward principal and a progressively smaller portion towards the interest. Also called amortizing loan.
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