All about intangible assets

• What is an asset?

• How to qualify a capital expenditure?

• What are the different types of fixed assets?

• How to value an intangible asset?

• How to account for an intangible asset?

What is an asset?

In accounting, a fixed asset represents a sustainable investment for the company, that is to say the purchase of a property which increases its assets and, in fact, its balance sheet. We speak of fixed assets to evoke fixed assets.

Fixed assets in the assets of a company reduce its result over several years in the form of depreciations and in relation to their useful life.

How to qualify a capital expenditure?

The expenses incurred by a company are qualified as expenses or fixed assets.

To be considered a fixed asset, an expense must:

• Be able to be identified
• Be the object of positive economic value
• Bring future benefits of an economic nature to the company

What are the different types of fixed assets?

There are three types of fixed assets:

1. Tangible immobilization: it designates a physical asset (land, building, office equipment, etc.)
2. Intangible asset : it is an intangible asset but meets the conditions for qualification as a fixed asset (for example goodwill, software, patent, etc.)
3. Financial imobilization : it is a monetary asset (loans, shares, equity securities, etc.)

How to value an intangible asset?

An intangible fixed asset must offer the company certain economic advantages in the future which are also durable. The value must also be assessed very precisely.
The intangible asset is generally valued at its purchase cost including the acquisition price and related costs.

When it is received free of charge, it should be valued at its market price.

How to account for an intangible asset?

The intangible asset is recognized as an asset. This accounting entry then makes it possible to depreciate the intangible fixed asset when appropriate.

The intangible fixed asset is amortized over its useful life, which depends on each intangible fixed asset.