Editing Intangible asset (section)

==Definition in accounting==
[[File:Intangible assets under the Corrado, Hultan and Sichel framework.png|thumb|Intangible assets under the Corrado, Hultan and Sichel framework<ref>{{Cite journal |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 |journal=wipo.int |language=en}}</ref>]]
Intangible assets may be one possible contributor to the disparity between "company value as per their accounting records", as well as "company value as per their market capitalization".<ref name=Lev>{{cite journal|last=Lev|first=Baruch|author2=Daum, Juergen|title=The dominance of intangible assets: consequences for enterprise management and corporate reporting|journal=Measuring Business Excellence|year=2004|volume=8|issue=1|pages=6–17|doi=10.1108/13683040410524694|url=http://iioe.de/fileadmin/files/publications/Lev_Daum_Dominanance_of_IA_MBE_2004.pdf|access-date=2012-12-19|archive-date=2016-03-04|archive-url=https://web.archive.org/web/20160304035445/http://iioe.de/fileadmin/files/publications/Lev_Daum_Dominanance_of_IA_MBE_2004.pdf|url-status=dead}}</ref> Considering this argument, it is important to understand what an intangible asset truly is in the eyes of an accountant. A number of attempts have been made to define intangible assets:
* The [[Australian Accounting Standards Board]] included examples of intangible items in its definition of ''assets'' in Statement of Accounting Concepts number 4 (SAC 4), issued in 1995.<ref name=AASB-SAC4>{{cite web|title=SAC 4: Definition and Recognition of the Elements of Financial Statements|url=http://www.aasb.gov.au/admin/file/content102/c3/SAC4_3-95.pdf|publisher=Australian Accounting Standards Board|access-date=19 December 2012}}</ref> The statement did not provide a formal definition of an intangible asset, but did explain that tangibility was not an essential characteristic of an asset.
* The [[International Accounting Standards Board]] standard 38 (IAS 38)<ref name=IAS38>{{cite web|title=IAS 38|url=http://www.iasplus.com/en/standards/standard37|publisher=International Accounting Standards Board|access-date=19 December 2012}}</ref><ref>{{Cite web |title=IFRS – IAS 38 Intangible Assets |url=https://www.ifrs.org/issued-standards/list-of-standards/ias-38-intangible-assets/ |access-date=2024-09-27 |website=www.ifrs.org}}</ref> defines an intangible asset as: "an identifiable non-monetary asset without physical substance". This definition is in addition to the standard definition of an asset which requires a ''past event'' that has given rise to a resource that the entity ''controls'' and from which ''future economic benefits'' are expected to flow. Thus, the extra requirement for an intangible asset under IAS 38 is ''identifiability''. This criterion requires that an intangible asset is separable from the entity or that it arises from a contractual or legal right.
* The [[Financial Accounting Standards Board]] Accounting Standard Codification 350 (ASC 350) defines an intangible asset as an asset, other than a financial asset, that lacks physical substance.

The lack of physical substance would therefore seem to be a defining characteristic of an intangible asset. Both the IASB and FASB definitions specifically preclude monetary assets in their definition of an intangible asset. This is necessary in order to avoid the classification of items such as accounts receivable, derivatives and cash in the bank as an intangible asset. IAS 38 contains examples of intangible assets, including: computer software, copyright and patents.