What is an intangible asset?

In accounting, an intangible asset is a resource with long-term financial value to a business. It also isn’t a material object. The meaning of intangible is something that can’t be touched or physically seen, according to the Cambridge Dictionary. Intangible resources don’t exist physically, though they still have value.

What is the difference between PPE and intangible assets?

Tangible assets, in contrast, are assets you can physically touch, which tend to fall under the PPE category—that is, “property, plant, and equipment.” Two types of intangible assets There are two main types of intangible assets: 1. identifiable intangible assets and 2. unidentifiable intangible assets.

What happens to intangible assets if a business goes bankrupt?

If a business creates an intangible asset, it can write off the expenses from the process, such as filing the patent application, hiring a lawyer, and paying other related costs. Intangible assets can lose value if the company that holds them goes bankrupt or fails.

What are tangible assets?

Tangible assets are either current (easily convertible into cash) or fixed (not easily convertible into cash). Fixed assets are also called capital assets. Assets normally appear on a company’s balance sheet, a common financial statement generated in accounting software.