Intangible assets are those assets that are not typically physical in nature and have no material substance. Almost all intangible assets will have no physical form but will provide value to businesses and their owners.
Intangible assets can be found in all areas of a business from technology to customer relationships, and exist alongside tangible assets (land, vehicles, equipment and inventory). Financial assets such as stock and bonds can also be referred to as tangible assets.
Key takeaways from this section:
- Intangible assets are assets that are not physical in nature but are still of value and importance to businesses.
- They can include aspects such as a patent, brand, trademark, copyright etc.
- Intangible assets that are created by a company will not appear on a balance sheet and have no recorded book value.
- Businesses can either create or acquire intangible assets, and they can be considered both definite and indefinite.
Understanding intangible assets
Intangible assets, in most cases, do not have a physical component. They can be found in all areas of a business; in technology as technical manuals, computer software, engineering processes, or in customer relationships, brand recognition, business processes, trade secrets, trademarks, marketing campaigns etc.
Intangible assets are of high value to a business and can be used to create profits, increase sales value, and bring income into your business. Intangible assets can be classified as either indefinite or definite. Aspects such as a company’s brand is considered to be an indefinite intangible asset as it stays with the company for as long as it operates. On the other hand, a definite intangible asset would something with a limited life, such as a legal agreement.
Intangible assets can prove to be very valuable for a business and can help to actually grow a business despite not having a physical component to them.
Intangible Assets FAQs
What exactly is an intangible asset?
An intangible asset is defined as an asset that has no physical form such as goodwill, brand recognition, copyrights, patents, trademarks etc. However, despite the fact that these assets do not have a physical component they are still of high value to a business. Intangible assets are valuable for a firm and can be critical to its long-term success or failure.
What is the difference between an indefinite and a definite intangible asset?
The main difference between indefinite and definite intangible assets is that indefinite assets are those that stay with the company for as long as it operates such as the company name. Definite assets on the other hand are those assets that have a shorter life, for example a legal agreement to operate under another company’s patent that has no plans for extension.
How are intangible assets valued?
As it is difficult to value assets that don’t exactly have a physical form. Different types of intangible assets will be valued differently, for example most intellectual property is valued based on the income it produces whilst the software that is developed and used is valued primarily on the cost to produce it. A third approach is market valuation which essentially is based on transactions that involve intangible assets exchanged in public trading.
Have you thought about Invoice Finance as a cash flow solution for your business?
Invoice finance allows you to release cash quickly from your unpaid invoices.
As your lender, we can release up to 90% of your invoices within 24 hours. On payment of the invoice from your customers, we will then release the final amount minus any fees and charges. There are different types of invoice financing options available to businesses depending on the situation and the level of control they require in collecting unpaid invoices.
We are an invoice financing company who offer a solution whereby payments are collected on your behalf managed by our team of expert credit controllers so you can focus on running your business. Our Confidential Invoice Discounting solution is offered to businesses who want to maintain their own credit control processes, therefore this remains strictly confidential so your customers are unaware of our involvement.
The benefits of invoice finance companies such as Novuna Business cash flow
Want to understand more Cash Flow Finance terms?
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We explore ways you can begin improving your cash flow situation and start getting your business on track to positive cash flow.
Competent staff, slick technology. Would recommend
Halo is one of the smartest bits of tech I have seen & every team is only as good a it's people and I would like to take this time to actually specifically point out Alex Hall & Claire Davies. Alex is an account manager that has continually improved during our time working together and is a real credit to Novuna. Claire has been exceptional from start to finish; meticulous in her work and very patient with us at every temp - an absolute star. It is a shame that the email address went to a generic platform and not each individual. I totally understand why this works better for companies but it did mean that the personal element was lost meaning that starts like Claire will be harder to identify from a customer point of view.
High recommedation for Novuna Business Cashflow.
My company was in need of invoice factoring to assist with the cashflow due to the nature of debtor days with our clients. After looking at a number of options, the right decision was made to work in partnership with Novuna Business Cashflow. Right from setup through sales to customer service, the communication and support has been outstanding. Providing me with all the information I needed regarding new clients coming onto our books. The system they use is so user friendly and the drawdown payments are very efficient in the fast moving world of temporary payroll. This has allowed my company to look at positive growth knowing we are safe financial hands. I would highly recommend Novuna Business Cashflow 10/10.
Set up went well and communication was good.
Syed and Vipul were extremely helpful top class service
Very helpful from the start
Great people made this process very straightforward.
Jemma from Novuna (formally Hitachi) was brilliant. Worked with us throughout the process and succeeded when some others had failed. Carried out the necessary checks with a smile and cheery demeanour, making what would have been a laborious process quite manageable.
Teething problems -Maybe ?
It's still early days so I may alter this review at a later date. However with retentions and concentration limits and other items, were finding were not getting 85% up front, were probably getting nearer 70% Also when a customer pays the remaining allegedly 15% due to us seems not to be credited to become available. For instance a customer paid Â£6918 and a customer paid Â£1300 hence we should see an extra Â£1330 available (15% of both these payments). However availability seemed to go down and not up by Â£1330 !!! Hard to work out where this 15% has actually gone ? I'll re-submit this review when things become clearer.
I found Hitachi true to their world in every aspect of the service they promised. I can't recommend enough.
Excellent Customer care and service.
Excellent customer service from start of initial conversations, right through to finally becoming a customer. The whole team involved are a credit to Hitachi, they were accommodating and informative the whole way along the process. I would highly recommend Hitachi to future clients and business associates. Thanks Alan.
I really enjoyed working with the Hitachi team, professional, helpful and really good people to deal with. They have made what could have been a very difficult experience a pleasure. Very happy to recommend them.
Hitachi made the process of moving factoring facilities painless, bearing in mind we previously had our facility with the same provider since 1997. I cant fault Hitachi's staff and processes and we are delighted with the move.
Staff excellent all together professional
Great service so far
From start to finish the process for transferring our invoice finance to Hitachi has been been brilliant, a smooth transition, great communication our link Person Jonathan Oakes has helped the process go through seamlessly, A great experience so far and a brilliant start to what we hope will be a long term partnership.