Editing Intangible asset (section)

{{Short description|Concept in accounting and economics}}
{{Globalize|date=February 2010}}
{{use dmy dates|date=June 2023}}
{{Accounting}}
An '''intangible asset''' is an [[asset]] that lacks physical substance. Examples are [[patent]]s, [[copyright]], [[exclusive right|franchises]], [[Goodwill (accounting)|goodwill]], [[trademark]]s, and [[trade name]]s, [[reputation]], [[Research and development|R&D]], [[Procedural knowledge|know-how]], [[organizational capital]] as well as any form of [[digital asset]] such as [[software]] and data. This is in contrast to physical assets (machinery, [[building]]s, etc.) and [[financial asset]]s (government securities, etc.).<ref>{{Cite web |title=World Intangible Investment Highlights – Better Data for Better Policy – World Intangible Investment Highlights |url=https://www.wipo.int/web-publications/world-intangible-investment-highlights-better-data-for-better-policy/en/world-intangible-investment-highlights.html |access-date=2024-09-27 |website=World Intangible Investment Highlights – Better Data for Better Policy |language=en}}</ref>

Intangible assets are usually very difficult to [[Valuation (finance)|value]]. Today, a large part of the corporate economy (in terms of [[net present value]]) consists of intangible assets,<ref name=":1">{{cite book |last1=Moberly |first1=Michael D. |title=Safeguarding Intangible Assets |date=2014 |page=16 |publisher=Butterworth-Heinemann |isbn=978-0-12-800516-3 |url=https://www.sciencedirect.com/book/9780128005163/safeguarding-intangible-assets}}</ref> reflecting the growth of information technology (IT) and organizational capital.<ref>{{Cite journal |last=Brynjolfsson |first=Erik |last2=Hitt |first2=Lorin M. |date=2000 |title=Beyond Computation: Information Technology, Organizational Transformation and Business Performance |url=https://www.aeaweb.org/articles?id=10.1257/jep.14.4.23 |journal=Journal of Economic Perspectives |language=en |volume=14 |issue=4 |pages=23–48 |doi=10.1257/jep.14.4.23 |issn=0895-3309}}</ref> Specifically, each dollar of IT has been found to be associated with and increase in firm market valuation of over $10, compared with an increase of just over $1 per dollar of investment in other tangible assets.<ref>{{Cite journal |last1=Brynjolfsson |first1=Erik |last2=Hitt |first2=Lorin M. |last3=Yang |first3=Shinkyu |date=2002 |title=Intangible assets: Computers and organizational capital |url=https://www.jstor.org/stable/1209176 |journal=Brookings Papers on Economic Activity |volume=2002 |issue=1 |pages=137–181 |doi=10.1353/eca.2002.0003 |jstor=1209176}}</ref> Furthermore, firms that both make organizational capital investments and have a large computer capital stock have disproportionately higher market valuations.<ref>{{Cite journal |last=Brynjolfsson |first=Erik |last2=Hitt |first2=Lorin M. (Lorin Moultrie) |last3=Yang |first3=Shinkyu |date=2002 |title=Intangible Assets: Computers and Organizational Capital |url=https://muse.jhu.edu/article/10359 |journal=Brookings Papers on Economic Activity |language=en |volume=2002 |issue=1 |pages=137–198 |doi=10.1353/eca.2002.0003 |issn=1533-4465}}</ref>