Question

Intangible assets, what are they and how they show on a typical financial statement of a
corporation? Patent, copy rights, trademarks, brands

Answer 1

Intangible assets are those assets which are of great value to the Company but which do not have any physical existence. It helps the Company to earn income but it is just an asset in documentary form.

Patent is a right for an invention unique in its features. Patent has nothing got in physical appearance but it is registered in document form with the authority. It helps the Company in earning income by licensing the patent or even by selling it.

Copyright means the owner of an intellectual property can allow other to copy the underlying asset by charging fees. It is again just a document registered for the intellectual property in the name of owner so others cannot use the same.

Trademark is a symbol represented for each company and it is unique to every company. Every Company register its trademark so that others cannot use the same and if they did they will be charged with penalty.

Brand is basically a product which a particular company has produced under a unique name. This name cannot be used by others. As all other intangible assets, brand does not have a physical existence and helps to earn income if others are allowed to use the brand name of the company.

Intangible assets are shown under the sub head non current assets which is under the head fixed assets on the asset portion of the financial statement.