Intangible Assets – Meaning and Explanation with example

Meaning of intangible Asset

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 

The lifespan of Intangible Assets: –

This type of assets has both types of lifespan shown as follows: –

  1. A definite period of life.
  2. Indefinite Period of Life.

1. A definite period of life.

A definite period of life means that asset which has a fixed expiry date.  

Example 

Most of the computer software has validity for a one or two year then after they will expire automatically. 

2. Indefinite Period of Life.

Indefinite Period of Life means that asset which has not a fixed expiry date.

Example 

Trade Name of the business which will continue with business till the end of the business. 

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