Intangible Assets and Goodwill
Analyzing Nonphysical Assets
Intangible assets lack physical substance but provide future economic benefits. Examples include patents, trademarks, copyrights, customer relationships, and software. Goodwill arises when a company acquires another business for more than the fair value of its identifiable net assets.
Note
Goodwill is not amortized under U.S. GAAP but must be tested periodically for impairment.
Summary
Intangible asset analysis focuses on valuation, amortization, impairment, and future economic benefits.