What is in the asset category of intangible assets on the balance sheet? This video provides you with the big picture on intangible assets. We start off with the definition of intangible assets, review examples of companies with a significant amount of intangible assets on their balance sheet, walk through an example including journal entries for acquired intangibles, discuss internally created intangibles, and end with intangible assets amortization and impairment.
In the International Financial Reporting Standards or IFRS, an intangible asset is defined as an identifiable non-monetary asset without physical substance. In US GAAP, an intangible asset is defined as an asset, other than a financial asset, that lacks physical substance. The first common factor is the lack of physical substance. An intangible asset does not physically exist, unlike a tangible asset such as a factory or a machine which would be in property, plant and equipment. Second common factor: an intangible asset is not a financial asset. Examples of monetary or financial assets are cash and cash equivalents, marketable securities, and accounts receivable.
Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers training in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!