814:(known also as R&D) is considered to be an intangible asset (about 16 percent of all intangible assets in the US), even though most countries treat R&D as current expenses for both legal and tax purposes. Most countries report some intangibles in their National Income and Product Accounts (NIPA), yet no country has included a comprehensive measure of 93180859 assets. The contribution of intangible assets in long-term GDP growth has been recognized by economists. Also of note, acquired "In-Process Research and Development" (IPR&D) is considered an asset under US GAAP.
25:
873:
amount paid to obtain a trademark must be capitalized. Certain amounts paid to facilitate these transactions are also capitalized. Some types of intangible assets are categorized based on whether the asset is acquired from another party or created by the taxpayer. The regulations contain many provisions intended to make it easier to determine when capitalization is required.
105:
1314:
872:
For personal income tax purposes, some costs with respect to intangible assets must be capitalized rather than treated as deductible expenses. Treasury regulations in the USA generally require capitalization of costs associated with acquiring, creating, or enhancing intangible assets. For example, an
858:
on a straight-line basis over their economic or legal life, whichever is shorter. Examples of intangible assets with identifiable useful lives are copyrights and patents. Intangible assets with indefinite useful lives are reassessed each year for impairment. If an impairment has occurred, then a loss
863:
is determined by subtracting the asset's fair value from the asset's book/carrying value. Trademarks and goodwill are examples of intangible assets with indefinite useful lives. Goodwill has to be tested for impairment rather than amortized. If impaired, goodwill is reduced and loss is recognized in
876:
Given the growing importance of intangible assets as a source of economic growth and tax revenue, and because their non-physical nature makes it easier for taxpayers to engage in tax strategies such as income-shifting or transfer pricing, tax authorities and international organizations have been
802:
The lack of physical substance would therefore seem to be a defining characteristic of an intangible asset. Both the IASB and FASB definitions specifically preclude monetary assets in their definition of an intangible asset. This is necessary in order to avoid the classification of items such as
753:
Intangible assets may be one possible contributor to the disparity between "company value as per their accounting records", as well as "company value as per their market capitalization". Considering this argument, it is important to understand what an intangible asset truly is in the eyes of an
820:
The classification of research and development expenditure can be highly subjective, and it is important to note that organizations may have ulterior motives in their classification of research and development expenditures. Less scrupulous directors may manipulate financial statements through
766:
in
Statement of Accounting Concepts number 4 (SAC 4), issued in 1995. The statement did not provide a formal definition of an intangible asset, but did explain that tangibility was not an essential characteristic of an
853:
Intangible assets are typically expensed according to their respective life expectancy. Intangible assets have either an identifiable or an indefinite useful life. Intangible assets with identifiable useful lives are
774:
standard 38 (IAS 38) defines an intangible asset as: "an identifiable non-monetary asset without physical substance". This definition is in addition to the standard definition of an asset which requires a
842:. In general, legal intangibles that are developed internally are not recognized and legal intangibles that are purchased from third parties are recognized. Wordings are similar to IAS 9.
803:
accounts receivable, derivatives and cash in the bank as an intangible asset. IAS 38 contains examples of intangible assets, including: computer software, copyright and patents.
35:
1158:
1054:
817:
IAS 38 requires any project that results in the generation of a resource to the entity be classified into two phases: a research phase, and a development phase.
884:
Definition of "intangibles" differs from standard accounting, in some US state governments. These governments may refer to stocks and bonds as "intangibles".
369:
845:
Under US GAAP, intangible assets are classified into: Purchased vs. internally created intangibles, and
Limited-life vs. indefinite-life intangibles.
835:
798:
Accounting
Standard Codification 350 (ASC 350) defines an intangible asset as an asset, other than a financial asset, that lacks physical substance.
771:
354:
1284:
1014:
759:
359:
1262:
Donaldson, Samuel A. Federal Income
Taxation Of Individuals: Cases, Problems and Materials (2nd ed.). St. Paul: Thomson West, 2007. pg. 200.
795:
668:
519:
223:
120:
374:
364:
130:
877:
designing ways to link intangible assets to the place where they were created, hence defining nexus. Intangibles for corporations are
426:
1325:
National intangible capital NIC 2016 database / Findings and results for economic impacts of national intangible capital 2001 - 2016
791:. This criterion requires that an intangible asset is separable from the entity or that it arises from a contractual or legal right.
554:
431:
69:
379:
322:
1349:
463:
416:
1155:
1271:"Action Plan on Base Erosion and Profit Shifting." (2013) Organisation for Economic Co-operation and Development (OECD).
1318:
1077:
51:
1339:
1004:
1196:
855:
958:
811:
661:
468:
745:) consists of intangible assets, reflecting the growth of information technology and organizational capital.
725:, etc.) and financial assets (government securities, etc.). Intangible assets are usually very difficult to
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178:
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104:
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878:
253:
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702:
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317:
183:
125:
47:
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898:
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168:
1055:"The dominance of intangible assets: consequences for enterprise management and corporate reporting"
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953:
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213:
188:
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860:
838:(IASB) offers some guidance (IAS 38) as to how intangible assets should be accounted for in
421:
307:
1162:
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are expected to flow. Thus, the extra requirement for an intangible asset under IAS 38 is
698:
509:
473:
263:
243:
228:
173:
158:
115:
1156:
https://www.bea.gov/scb/pdf/2013/03%20March/0313_nipa_comprehensive_revision_preview.pdf
1344:
1153:
Preview of the 2013 Comprehensive
Revision of the National Income and Product Accounts.
730:
514:
482:
193:
1333:
1176:
738:
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624:
487:
406:
401:
238:
931:
559:
298:
1197:"AICPA Issues Practice Aid on Acquired In-Process Research and Development Assets"
1130:
943:
445:
1073:
710:
549:
233:
96:
1241:
For international legal lives by class of intangible asset, see the table in
754:
accountant. A number of attempts have been made to define intangible assets:
1272:
926:
911:
706:
694:
1103:"SAC 4: Definition and Recognition of the Elements of Financial Statements"
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722:
718:
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332:
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218:
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690:
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153:
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501:
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148:
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http://www.federalreserve.gov/pubs/feds/2006/200624/200624pap.pdf
288:
18:
1324:
991:
Investment in
Intangible Capital: An Enterprise Perspective.
821:
misclassification of research and development expenditures.
741:. Today, a large part of the corporate economy (in terms of
762:
included examples of intangible items in its definition of
1183:
Federal
Reserve Board Discussion Paper N. 2006-24. April.
1030:
Brynjolfsson, Erik; Hitt, Lorin M.; Yang, Shinkyu (2002).
1032:"Intangible assets: Computers and organizational capital"
43:
721:. This is in contrast to physical assets (machinery,
1172:
1170:
993:
The
Economic Record, Vol. 82, No. 256, March, 82-96.
779:that has given rise to a resource that the entity
881:over a 15-year period, equivalent to 180 months.
662:
32:The examples and perspective in this article
8:
1179:. Charles Hulten, and Daniel Sichel (2006).
989:Webster, Elisabeth; Jensen, Paul H. (2006).
689:that lacks physical substance. Examples are
1243:Tax amortization lives of intangible assets
370:International Financial Reporting Standards
1133:. International Accounting Standards Board
669:
655:
83:
1273:http://www.oecd.org/sti/inno/46349020.pdf
1206:(14-4 ed.). KPMG, LLD. January 2014.
70:Learn how and when to remove this message
836:International Accounting Standards Board
772:International Accounting Standards Board
1181:Intangible Capital and Economic Growth.
1125:
1123:
1108:. Australian Accounting Standards Board
969:
95:
1218:"What are intangibles? | RoyaltyRange"
1036:Brookings Papers on Economic Activity
1009:. Butterworth-Heinemann. p. 16.
760:Australian Accounting Standards Board
360:Generally-accepted auditing standards
7:
1151:Bureau of Economic Analysis (2013).
985:
983:
981:
979:
977:
975:
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796:Financial Accounting Standards Board
1053:Lev, Baruch; Daum, Juergen (2004).
375:International Standards on Auditing
16:Asset that lacks physical substance
859:must be recognized. An impairment
14:
432:Notes to the financial statements
1312:
380:Management Accounting Principles
103:
23:
1042:(1): 137–181 – via JSTOR.
1006:Safeguarding Intangible Assets
1:
1062:Measuring Business Excellence
355:Generally-accepted principles
1003:Moberly, Michael D. (2014).
46:, discuss the issue on the
1366:
729:.They suffer from typical
1253:Treas. Reg. § 1.263(a)-4.
1074:10.1108/13683040410524694
713:, as well as any form of
224:Constant purchasing power
121:Constant purchasing power
1285:"Florida Intangible Tax"
959:Intangible asset finance
812:Research and development
807:Research and development
785:future economic benefits
555:Accounting organizations
543:People and organizations
303:Amortization (business)
1350:Management cybernetics
949:Tangible common equity
864:the Income statement.
939:Goodwill (accounting)
904:Intellectual property
427:Management discussion
1321:at Wikimedia Commons
1222:www.royaltyrange.com
899:Intellectual capital
840:financial statements
825:Financial accounting
394:Financial statements
347:Accounting standards
52:create a new article
44:improve this article
34:may not represent a
620:Earnings management
590:Positive accounting
464:Double-entry system
454:Bank reconciliation
259:Revenue recognition
1161:2017-07-02 at the
849:Expense allocation
595:Sarbanes–Oxley Act
530:Sarbanes–Oxley Act
459:Debits and credits
294:Cost of goods sold
249:Matching principle
1340:Intangible assets
1319:Intangible assets
1317:Media related to
1016:978-0-12-800516-3
954:Tangible property
830:General standards
743:net present value
679:
678:
640:Two sets of books
635:Off-balance-sheet
277:Selected accounts
214:Accounting period
80:
79:
72:
54:, as appropriate.
1357:
1316:
1301:
1300:
1298:
1296:
1287:. Archived from
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1076:. Archived from
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1044:
1043:
1027:
1021:
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994:
987:
922:Patent valuation
894:Cognitive assets
683:intangible asset
671:
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1204:Defining Issues
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1163:Wayback Machine
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1083:on 4 March 2016
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789:identifiability
783:and from which
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731:market failures
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264:Unit of account
244:Historical cost
229:Economic entity
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116:Historical cost
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1307:External links
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1291:on 16 May 2015
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1177:Corrado, Carol
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483:General ledger
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38:of the subject
36:worldwide view
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739:excludability
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715:digital asset
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625:Error account
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488:Trial balance
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469:FIFO and LIFO
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407:Balance sheet
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402:Annual report
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239:Going concern
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60:February 2010
53:
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45:
39:
37:
30:
21:
20:
1293:. Retrieved
1289:the original
1279:
1267:
1258:
1249:
1237:
1225:. Retrieved
1221:
1212:
1203:
1191:
1180:
1152:
1147:
1135:. Retrieved
1110:. Retrieved
1097:
1085:. Retrieved
1078:the original
1065:
1061:
1048:
1039:
1035:
1025:
1005:
998:
990:
932:Trade secret
883:
875:
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844:
833:
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788:
784:
780:
776:
763:
752:
682:
680:
560:Luca Pacioli
481: /
301: /
299:Depreciation
207:Key concepts
179:Governmental
81:
66:
57:
33:
1137:19 December
1112:19 December
1087:19 December
1068:(1): 6–17.
944:Real assets
711:trade names
573:Development
550:Accountants
446:Bookkeeping
365:Convergence
323:Liabilities
254:Materiality
142:Major types
1334:Categories
965:References
777:past event
749:Definition
707:trademarks
699:franchises
608:Misconduct
234:Fair value
184:Management
126:Management
97:Accounting
1295:2 October
927:Trademark
912:Copyright
879:amortized
856:amortized
723:buildings
695:copyright
630:Hollywood
510:Financial
412:Cash-flow
169:Financial
48:talk page
1159:Archived
1131:"IAS 38"
888:See also
868:Taxation
781:controls
737:and non-
719:software
717:such as
703:goodwill
615:Creative
585:Research
515:Internal
502:Auditing
318:Goodwill
313:Expenses
164:Forensic
89:a series
87:Part of
42:You may
1227:8 March
735:rivalry
733:of non-
691:patents
580:History
474:Journal
333:Revenue
219:Accrual
1013:
917:Patent
767:asset.
764:assets
709:, and
685:is an
525:Report
479:Ledger
422:Income
417:Equity
328:Profit
308:Equity
284:Assets
189:Social
154:Budget
1345:Asset
1200:(PDF)
1106:(PDF)
1081:(PDF)
1058:(PDF)
908:Brand
727:value
687:asset
520:Firms
149:Audit
50:, or
1297:2010
1229:2023
1139:2012
1114:2012
1089:2012
1040:2002
1011:ISBN
861:loss
834:The
794:The
770:The
758:The
289:Cash
174:Fund
159:Cost
1070:doi
681:An
194:Tax
131:Tax
1336::
1220:.
1202:.
1169:^
1122:^
1064:.
1060:.
1038:.
1034:.
972:^
705:,
701:,
697:,
693:,
91:on
1299:.
1231:.
1141:.
1116:.
1091:.
1072::
1066:8
1019:.
670:e
663:t
656:v
73:)
67:(
62:)
58:(
40:.
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