Difference Between Tangible and Intangible Assets

Difference Between Tangible Assets and Intangible Assets

The major difference in both terms is on the basis of the visibility and ability to touch. To know the more Differences between Tangible and Intangible Assets, we have to know the meaning of both terms. So, the meaning of both terms are explained below: –

Meaning of Tangible Assets: –

Those assets which can be touch, feel, and see are called Tangible assets. In other words, all those assets which have physical existence are known as Tangible assets. Both categories of assets i.e. Fixed and Current assets have a subcategory of tangible asset. 

They always have risk from the human activities i.e. theft, destroyed or any accident happened at business premises. So, that why most of the businesses get insurance of these type of assets. 

Example of Tangible Assets Under the Head of Fixed Assets: –

Under the category of Fixed assets, there are a lot of examples of Tangible assets. This is the main category of these type of assets. Most of these type of assets are fall under the category of Fixed assets. These are shown as follows: –

  • Plant and Machine
  • Land and Building 
  • Furniture and Fixture 
  • Office Equipment 
  • Computers 
  • Vehicles 
  • Investment

Example of Tangible Asset Under the Head of Current Asset: –

Under the category of Fixed assets examples of Tangible assets  are shown as follows: –

  • Cash 
  • Bank 
  • Inventories
  • Marketable Securities 
  • Bills Receivables 

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Tangible Assets – Explained with example

Meaning of Intangible Assets: –

Those assets which cannot be touch, feel, and see are called intangible assets. in other words, all those assets which don’t have any physical existence are known as intangible assets. 

They don’t have any risk from the human being activities i.e. theft, destroyed or any accident happened at business premises. So, that’s why most of the businesses don’t need to get insurance of these type of assets. 

Example of Intangible Assets: –

Example of Intangible Assets are shown as follows: –

  • Goodwill 
  • Patent
  • Trade Marks 
  • Copyrights 
  • Business Name
  • Computer Software 

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Intangible Assets – Explained with example

Chart of Difference Between Tangible Assets and Intangible Assets: –

Basis of Difference

Tangible Assets

Intangible Assets

Meaning

Those assets which can be touch, feel, and see are called Tangible assets. Those assets which cannot be touch, feel, and see are called intangible assets.

Length of Period of usage

The period of getting benefits from these types of assets are more than from one financial year. The period of getting benefits from these types of assets are less than from one financial year.

Physical Existence

These type of assets have a physical existence. These type of assets have not a physical existence.

Depreciation or Amortization 

These types of assets (except Land) have depreciation according to time. These types of assets (except Land) have amortized according to time.

Able to Liquidate

These assets can be liquidated easily as compared to Intangible assets because they have a physical existence.  These assets cannot be liquidated easily as compared to Tangible assets because they don’t have a physical existence. 
Helping in These are majorly helpful in Growth of Business and creating entry barriers. These are majorly helpful in increasing the Brand value of the business.
Financed  These type of assets can be financed.  Most of these type of assets cannot be financed. Like Goodwill, Business Name. 
Calculation of Book Value The calculation of Book value of these types of assets is very easy. The calculation of Book value of these types of assets is very difficult. Like for the calculation of the amount of goodwill, there is the number of methods is available.  

Download the chart: –

If you want to download the chart please download the following image and PDF file:-

Chart of Difference Between Tangible Assets and Intangible Assets 1 251x300 - Difference Between Tangible and Intangible Assets
Chart of Difference Between Tangible Assets and Intangible Assets

 

application pdf - Difference Between Tangible and Intangible Assets
Chart of Difference Between Tangible Assets and Intangible Assets

 

The conclusion of Difference: –

The main difference in both types of assets is the basis on visibility and ability to touch. The Tangible assets are visible and can touch and Intangible assets are not visible and cannot touch.

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T.S. Grewals Double Entry Book Keeping - Difference Between Tangible and Intangible Assets

T.S. Grewal’s Double Entry Book Keeping

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