Intangible Assets In Balance Sheet with Example

 Welcome back to our Today we are going to show intangible assets on the balance sheet with an example that can help you understand intangible assets in the balance sheet.

intangible assets definition

Intangible assets encompass non-physical assets lacking a tangible form, such as intellectual property, brand recognition, patents, trademarks, copyrights, goodwill, and more. 

intangible assets on the balance sheet

Intangible Assets In Balance Sheet 

Now let's take a look at what are the intangible assets on the balance sheet:

• Patents: Exclusive rights to inventions (e.g., pharmaceuticals, technology)

• Trademarks: Distinctive symbols or words representing brands. 

• Copyrights: Legal protection for original works.

• Industrial designs: Protection for the ornamental or aesthetic aspects of a product.

2. Goodwill

3. Licenses and Franchises

4. Customer-Related 

• Customer lists: Information about customers and their purchase history

• Non-compete agreements: Contracts restricting employees from working for competitors.

5. Internal Developments:

• Software: Developed or acquired computer programs and associated documentation

• Research and development (R&D) costs

• Brand recognition

6. Other:

• Website domain names

• Trade secrets

• Goodwill arising from intangible assets

These are all intangible assets that are typically seen on the balance sheet.

Now let's move the balance sheet with intangible assets example:

Intangible Assets In Balance Sheet

Assets		Liabilities and Equity
Current Assets:		Current Liabilities:
Cash	200,000	Accounts Payable	80,000
Accounts Receivable	150,000	Short-term Debt	50,000
Inventory	120,000	Accrued Expenses	30,000
Total Current Assets	470,000	Total Current Liabilities	160,000
Fixed Assets:		Long-term Debt:
Property, Plant & Equipment	600,000	Long-term Loans	200,000
Less: Accumulated Depreciation	(100,000)
Net Fixed Assets	500,000	Total Long-term Debt	200,000
Intangible Assets:
Goodwill	80,000
Intellectual Property	70,000
Brand Names	50,000
Customer Relationships	60,000
Patents	40,000
Total Intangible Assets	300,000
Total Assets	1,270,000	Total Liabilities	360,000
Equity:
Common Stock	300,000
Retained Earnings	610,000
Total Equity	910,000
Total Liabilities and Equity	1,270,000

There are five different types of intangible assets in this given balance sheet:

• Goodwill: 80,000
• Intellectual Property: 70,000
• Brand Names: 50,000
• Customer Relationships: 60,000
• Patents: 40,000

Conclusion

In hope you guys understand our given example for intangible assets in the balance sheet. Please follow our blog for the Balance sheet example.