An intangible asset is any asset that has no physical form. However, this asset does not include monetary assets.
Goodwill is basically just the value of a company that cannot be attributed to the assets of the company. For example, if you buy a company for $1,000,000, but it only had $700,000 worth of assets, the goodwill is worth $300,000.
In my mind, I like to think of goodwill as the value of the branding of the company. In non-accounting terms, goodwill is the feeling the community has towards the company.
Customer lists are an incredibly valuable intangible asset in many companies. In my experience, especially in smaller companies, it’s the customer list that company buyers want.
Intellectual property includes all the copyrights, patents, trademarks, and trade secrets of your company. Patents are generally the most valuable of all of these, but that depends on your company. For example, a photographer’s most valuable asset is likely its copyright portfolio.
The contracts your company has come with a value. For example, there’s a value to long term contracts signed by current or future customers. However, in order to be valuable, they need to be measurable.
- Licensing Agreements
- Service Contracts
- Lease Agreements
- Franchise Agreements
- Broadcast Rights
- Employment Contracts
- Use Rights (like drilling/water rights)
These aren’t all the intangible assets of a company. However, this is a good list to start. Accounting is an ever-expanding field as people develop new types of assets and business practices.