Intangible assets are understood to be that part of a company's fixed assets that is non-physical (e.g. patents or land).
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Definition / explanation
Intangible assets are non-physical assets that are owned by a company and can be recognized on the company's balance sheet.
Examples of intangible assets:
- Property of a company
- Inventions, concessions and rights (e.g. patents, licenses, purchase and delivery rights as well as copyrights and publishing rights)
Activation of intangible assets
If intangible assets are purchased, there is an obligation to capitalize. They must therefore be shown in the balance sheet (in accordance with Section 248, Paragraph 2, Clause 1 of the German Commercial Code).
Ein Wahlrecht hingegen besteht bei solchen Gütern, die im Unternehmen selbst erschaffen wurden. Dies ist z.B. eine Software, die das Unternehmen selbst entworfen hat und das ausschließlich im eigenen business verwendet wird.
There is also an option for development costs, but research costs cannot be capitalized. In accordance with Section 266 (2) AI 1. HGB, such items are referred to in the balance sheet as “self-created industrial property rights and similar rights and values”. The prohibition of activation is regulated in Section 248 (2) sentence 2 of the German Commercial Code (HGB). This applies to self-created trademarks as well as printing rights and similar rights.
Amortization of intangible assets
Scheduled amortization is normally carried out if the useful life of the intangible asset is limited. Some assets, such as a domain name, are not designed to wear and tear.