Intangible assets are those assets that do not exist physically still they are very much important for a business. These are the long term resources that do not have a physical character but add value to a business. Examples of intangible assets are the name of the business, brand, intellectual property, formula, knowledge, trademarks and copyrights of the business. Intangible assets can be categorized as indefinite and definite depending upon the nature of the asset. For example the name of a brand or a company is indefinite asset as it stays with the company or business for the life time of the business. On the other hand definite intangible assets are those assets that may lose with the course of time such as goodwill of the business or patents.
One of the key characteristics of intangible assets is that they cannot be destroyed accidents or other disasters. However they cannot be used as collateral to raise funds for the business. Intangible assets can be destroyed by carelessness or poor business policy. For example a business can lose its good will and repute if it is unable to satisfy the customers. The importance and value of the intangible assets is increasing with each passing day. The market value of intangible assets depends upon the market value of tangible assets. The formula used to calculate the intangible assets is to deduct net value of tangible assets or a company from its market value.