Intangible assets (definition)
Intangible assets are non-physical assets that have a theoretical value to a business. They are often related to things like intellectual property and goodwill.
Intangible assets can be split into two groups:
- Identifiable intangible assets can be separated from other assets and can even be sold or bought from other businesses. Examples include copyrights, trademarks and trade names, patents, licences, and intellectual property.
- Unidentifiable intangible assets can’t be separated from the business. The most common one is goodwill.
Intangible assets are expected to generate returns for the business in the future. They are recorded as long-term assets on the balance sheet with the business or independent experts deciding their value. Unlike tangible assets, which are depreciated, intangible assets are amortized.
Intangible assets are a type of non-current (long-term) asset along with fixed assets and long-term investments.
See related terms
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.