Intangible assets

Published Thursday 23 July 2026

Table of contents

• What are intangible assets?
• Types of intangible assets
• Examples of intangible assets
• Intangible assets vs tangible assets
• How intangible assets appear on the balance sheet
• Amortising intangible assets
• How intangible assets are valued
• Keep track of your assets with Xero
• FAQs on intangible assets
• Related Terms
• Learn more about intangible assets

Key takeaways

• Intangible assets are non-physical assets that hold value for your business, such as intellectual property and goodwill.
• They split into identifiable assets you can sell separately, like patents and trademarks, and unidentifiable assets like goodwill.
• Intangible assets sit as non-current assets on your balance sheet, and those with a finite life are amortised over that life.
• Valuing intangible assets is harder than valuing physical ones, so a business or independent expert often assesses the value.

What are intangible assets?

Intangible assets are non-physical assets that have value to a business, often relating to intellectual property and goodwill. You can’t touch them, but they still add real worth to what your business owns.

For a small business owner, intangible assets matter because they can make up a big part of your company’s value. A recognised brand, a loyal customer base, or a registered trademark can help you win work, raise finance, or sell the business one day.

Types of intangible assets

Intangible assets fall into two broad groups, based on whether you can separate them from the rest of your business. Knowing which group an asset belongs to helps you record and value it correctly.

Identifiable intangible assets

Identifiable intangible assets can be separated from the business and sold, licensed, or transferred on their own. They usually have clear legal rights attached, which makes them easier to value.

• Copyrights
• Trademarks and trade names
• Patents
• Licences
• Intellectual property

Unidentifiable intangible assets

Unidentifiable intangible assets can’t be separated from the business and sold on their own. The most common example is goodwill, which reflects the extra value of your business beyond its physical assets, such as reputation and customer relationships.

Examples of intangible assets

Intangible assets show up in most businesses, even small ones, though they’re easy to overlook. Here are some common examples you might already own:

• Goodwill
• Patents
• Trademarks and trade names
• Copyrights
• Licences
• Software
• Brand recognition

Intangible assets vs tangible assets

The main difference is physical form: tangible assets are things you can touch, like vehicles, equipment, and stock, while intangible assets have no physical substance. If you want to compare the wider asset categories, see how current assets vs fixed assets work.

The two types are also treated differently in your accounts. Tangible assets lose value through depreciation, while intangible assets with a finite life are amortised instead.

Intangible assets are usually harder to value than tangible ones, and they’re often less liquid because there isn’t always a ready market to sell them.

How intangible assets appear on the balance sheet

Intangible assets are recorded as non-current assets, meaning long-term assets your business expects to hold for more than a year. You’ll find them alongside other long-term items rather than with cash or stock.

Intangible assets you’ve built up internally, such as your own brand or reputation, often aren’t recorded on the balance sheet at all. When an intangible asset is recorded, its value is usually set by the business or by independent experts.

Amortising intangible assets

Intangible assets with a finite useful life are amortised, which spreads their cost across the years you expect to use them. You can read more about how amortisation works and why it matters for your accounts.

Intangible assets with an indefinite useful life, such as goodwill, aren’t amortised. Instead, they’re tested for impairment to check their value hasn’t dropped, in line with international accounting standards like IAS 38.

How intangible assets are valued

Valuing intangible assets is harder than valuing tangible ones, because there’s often no obvious market price to point to. As a result, a business or an independent expert usually assesses the value.

Common approaches look at the market value of similar assets, the income the asset is expected to earn, or the cost to recreate it from scratch. The right method depends on the asset and why you need the valuation.

Keep track of your assets with Xero

Keeping an accurate record of what your business owns makes reporting, tax time, and decision-making far simpler. Xero brings your finances together in one place, so you can track your assets, run reports, and see where your business stands in real time. Get set up today and get one month free.

FAQs on intangible assets

Here are answers to some frequently asked questions about intangible assets to clear up the finer points.

Are intangible assets current assets?

No, intangible assets are usually classed as non-current assets because you hold them for the long term. Current assets are things you expect to use or convert to cash within a year, like stock and receivables.

Are intangible assets fixed assets?

Intangible assets and fixed assets are both long-term, but fixed assets are physical items like buildings and machinery. Intangible assets sit in their own category on the balance sheet because they have no physical form.

Is intellectual property an intangible asset?

Yes, intellectual property is an identifiable intangible asset, since you can own, license, or sell it separately. It covers things like patents, copyrights, and trademarks.

What’s the difference between amortisation and depreciation?

Amortisation spreads the cost of an intangible asset over its useful life, while depreciation does the same for tangible assets. The idea is the same, but the term you use depends on whether the asset is physical.

How do you value intangible assets?

Valuations usually consider the asset’s market value, its expected income, or the cost to recreate it. Because it’s a specialist task, many businesses ask an independent expert to assess the figure.

Related Terms

• Fixed assets
• Current assets
• Liabilities
• Accounting equation

Learn more about intangible assets

• Is accumulated depreciation an asset?
• International accounting standards: what you need to know
• What is inventory?
• Accounting glossary