Correct Answer - Option 4 : A
The Correct Answer is "A".
- An intangible asset is an asset that is not physical in nature. Goodwill, brand recognition and intellectual property, such as patents, trademarks, and copyrights, are all intangible assets. Intangible assets exist in opposition to tangible assets, which include land, vehicles, equipment, and inventory.
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Financial assets such as stocks and bonds, which derive their value from contractual claims, are considered tangible assets.
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Businesses can create or acquire intangible assets.
- An intangible asset can be considered indefinite (a brand name, for example) or definite, like a legal agreement or contract.
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Intangible assets created by a company do not appear on the balance sheet and have no recorded book value.
- While an intangible asset doesn't have the obvious physical value of a factory or equipment, it can prove valuable for a firm and be critical to its long-term success or failure.
- For example, a business such as Coca-Cola wouldn't be nearly as successful if it not for the money made through brand recognition.1 Although brand recognition is not a physical asset that can be seen or touched, it can have a meaningful impact on generating sales.
