Intangible Assets

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An intangible asset is defined as one which does not have any physical presence like IPRs (Intellectual property rights for e.g. trademark, copyrights, and trade secret), brand recognition and goodwill are common intangible assets in market place these days. Intangible assets are distinguished from prepaid expenses in that they have a longer life span than prepaid expenses. Intangible assets like Intellectual properties have limited life span because of this fixed life span they amortize. According to accounting standard 26 “An intangible asset is an identifiable non-monetary asset, without physical substance, held for use in the production or supply of goods or services, for rental to others, or for administrative purposes”
Some intangible
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Therefore, the information presented in company's financial statement are important to users, since they are the basis for making decisions about allocation of resources, which are always limited. This fact justifies the increased interest of different interest groups for events in the area of financial reporting in general, and financial reporting on intangible assets as well. This happens, primarily, for two reasons. The first reason lies in the fact that, today, the intangible assets are considered to be the key factor of value generating and the potential of growth and development of a company. Based on knowledge, education, organizational and professional experience, motivation of employees, interpersonal relations and the like, intangible assets become the main factor of material form of value creation and the creation of global competition which in the same time relativises the role of financial and physical capital. The fact is that knowledge has been the main source of long-term economic growth ever since the Industrial Revolution, however, what distinguishes its current meaning, as a generator of growth, is the fact that the information and communication technology accelerated the shift towards a knowledge economy, enabling rapid transmission of information over long distances at low cost. Certainly, the traditional factors of production have not disappeared, but they have become secondary, i.e. it is considered that intangible assets as an element of business operations, in addition to tangible assets, have a primary contribution to company's earning power. Success of the company, for the most part, is an effect of the current knowledge, skill, flexibility and management creativity, which is the key element for gaining the competitive advantage. For these reasons, the information needs of numerous users are directed towards the consideration of a "new" resource of a company, such as internally
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