Which of the following is an intangible asset?

A. Goodwill

B. Receivables

C. Stock

D. Cash

Answer: A. Goodwill

Assets lacking physical substance are known as intangible assets. Copyrights, trademarks, goodwill, patents, franchises, and trade names are examples of intangible assets. These assets are very difficult to evaluate due to their intangibility and therefore tend to suffer from market failures of non-excludability and non-rivalry. Intangible assets are the opposite of physical or financial assets (tangible assets).

Intangible assets created by a company do not have a recorded book value and do not appear on the balance sheet either. An intangible asset is either definite or indefinite. An indefinite intangible asset will stay with the company as long as operations are still on. An example is the brand name of the company. A definite intangible asset however has a limited life. An example is a legal agreement made for a company to operate under the patent of another company.

Economics

3 years ago

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