What is Intangible Asset?

Intangible assets are resources that have value but no physical form. They include intellectual property (patents, trademarks, copyrights), software and technology, customer relationships, brand recognition, goodwill from acquisitions and various licences and permits. Intangible assets can be internally generated (like developing your own software or building a brand) or acquired (like purchasing a patent or acquiring a business with goodwill). Accounting treatment varies: purchased intangible assets are recorded at cost and amortised over their useful life, while internally generated intangibles often cannot be capitalised under accounting standards (with some exceptions like development costs). Intangible assets are increasingly important in the modern economy - for many businesses, their intangible assets (brand, technology, customer relationships) are worth more than their physical assets. SortBooks correctly categorises intangible asset acquisitions and ensures amortisation is properly recorded in Xero.