Intangible Assets
Non-physical long-term assets including brands, customer relationships, technology, patents, and licences, recognised on the balance sheet.
Also known as: Intangibles, IP, Intellectual property
One-line definition
Intangible assets are non-physical sources of value — patents, software, customer lists, trademarks — that generate future economic benefits.
Internally generated vs acquired
Internally generated intangibles (brands, customer relationships) are generally not recognised under IFRS. Acquired intangibles (in a business combination) must be separately identified and valued in the purchase price allocation (PPA).
TS relevance
Amortisation of acquired intangibles (post-acquisition) hits EBIT but is added back in EBITDA. TS teams assess whether the amortisation charge is reasonable and flag cases of accelerated or delayed amortisation.
Related terms
Goodwill
The intangible asset recorded on a buyer's balance sheet when the acquisition price exceeds the fair value of the net identifiable assets of the acquired entity.
D&A (Depreciation & Amortisation)
The systematic allocation of the cost of tangible (depreciation) and intangible (amortisation) long-term assets over their useful lives.
Enterprise Value (EV)
The total value of a business, representing what a buyer pays for 100% of the company on a cash-free, debt-free basis.