Fundamental Glossary / Financial Statements
Intangible Assets
Non-physical assets such as software, licences, brands, customer relationships, and patents.
Formula
Purchased intangibles are capitalised and usually amortised. Internally generated brands and customer lists are generally not put on the balance sheet.
What it means
Intangibles are real when they produce cash, even though you cannot kick them. A spectrum licence or a patented drug is an asset. A slogan that was never purchased usually is not on the books.
Goodwill is related but accounted for separately. It is the premium paid in an acquisition, not a separately identified intangible.
How to read it
Amortisation of a finite-life intangible is a real charge if the right expires. An indefinite-life intangible is tested for impairment instead.
What to watch
Capitalising development spend turns an expense into an asset and lifts current profit. The note on accounting policy tells you whether that choice is aggressive.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.