Okuzeka
Accounting & Tax vocabulary · Assets, Liabilities & Equity

Intangible asset

Meaning in accounting & tax, with examples

nounCommon term

In accounting & tax, intangible asset means: An asset with no physical form that still has value for the business, such as software, patents, trademarks, licences or customer relationships.

In Turkish: maddi olmayan duran varlık, haklar

How it is used

Intangible assets are capitalised when they meet strict criteria and are then amortised. Goodwill is a special intangible: under IFRS it is not amortised but tested for impairment.

Example sentences

  1. Development costs for the new app were capitalised as an intangible asset.

  2. Brands a company creates itself are not recognised as intangible assets.

Common collocations

  • capitalise an intangible asset
  • amortise intangible assets
  • intangibles
  • indefinite useful life
  • amortizationThe gradual spreading of the cost of an intangible asset, such as software, a licence or a patent, over its useful life, recorded as an expense.
  • goodwillAn intangible asset that arises when a company buys another business for more than the fair value of its identifiable net assets.
  • fixed assetA long-term physical asset that a business uses to operate rather than to sell, such as buildings, machinery, vehicles or computers.
  • impairmentA fall in the value of an asset below the amount shown in the books, recorded as a loss so that the asset is not overstated.

More terms: Assets, Liabilities & Equity

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This page explains English vocabulary for learners. It is not financial advice.