Intangible asset

An intangible asset is an asset that lacks physical substance. Examples are patents, copyright, franchises, goodwill, trademarks, in addition to trade names, as well as software. This is in contrast to physical assets machinery, buildings, etc. & financial assets government securities, etc.. An intangible asset is ordinarily very unoriented to valuate. They suffer from typical market failures of non-rivalry and non-excludability. Today, a large factor of the corporate economy NPV consists of intangible assets.

Research and development

] The contribution of intangible assets in long-term GDP growth has been recognized by economists. Also of note, acquired "In-Process Research and Development" IPR&D is considered an asset under US GAAP.

IAS 38 requires any project that results in the brand of a resource to the entity be classified into two phases: a research phase, and a developing phase.

The vintage of research and developing expenditure can be highly subjective, and this is the important to note that organizations may defecate ulterior motives in their classification of research and development expenditures. Less scrupulous directors may manipulate financial statements through misclassification of research and development expenditures.[]