Intangible assets, Accounting Standards

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These are assets or things of value without physical dimensions. They cannot be touched; they representing intrinsic value without material being and they are incorporeal. One of the most general of these assets is goodwill. Goodwill reflects the capability of a firm to earn profits in excess of normal return. Approximately all firms may have much goodwill. Though, they appear in the books and balance sheet only when it has been purchased. Generally, when a going relates is purchased, so the purchase price paid in excess of the fair value of the assets is identified goodwill. The amount is classified as asset 'goodwill' on the balance sheet. As fixed assets, the value of intangible assets must also be expired over a period of time. That an expiration cost is termed as amortization, as the same to depreciation.


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