The International Accounting Standards 38 (IAS 38) defines an
intangible asset as: "an identifiable non-monetary asset
without physical substance." The International Financial
Reporting Standards Committee developed IAS 38 to manage the
financial accounting and reporting of intangible assets. Intangible
assets include intellectual property such as patents (technology),
trade marks (brands), franchises, designs, copyright, trade
secrets, confidential information and know-how.
As mentioned, intangible assets are non-physical assets as
reflected on a company's balance sheet that indicate the
potential for future economic benefits. Under the Generally
Accepted Accounting Principles (GAAP), intangible assets are
categorized as either acquired intangible assets or internally
generated intangible assets. In terms of IAS 38, internally
generated intangible assets cannot be reflected on the balance
sheet of companies or corporations.
