What is an intangible asset?
An asset which doesn't take a physical form, with intellectual property the main example.
Whereas cash, stocks and land are all tangible assets, things like trademarks, patents and brand recognition are classed as intangible. But just because an asset is intangible doesn't mean it's automatically less valuable. For example, in 2016 Apple brand name was valued at $178bn.
Where have you heard about intangible assets?
The term can hit the headlines in legal battles when a company feels its copyright or patents have been breached. This might be the case if a firm has an iconic brand identity, or a secret recipe that makes it distinct from competitors.
What you need to know about intangible assets.
Along with its physical assets, it's wise to consider a company's intangible assets before investing in it.
Intangible assets generally fall into one of two categories: indefinite or definite. An example of an indefinite (or unlimited-life) intangible asset is a company's brand identity. That's because its brand name will remain its property as long as it continues to be active. In comparison, definite (or limited-life) intangible assets can include patents and copyrights, since they may only apply for a set period of time.
Find out more about intangible assets.
Intangible assets cover very different things to tangible assets. To learn more about their key differences, see tangible assets.