Foreign investment decisions - Research Paper Example

Intangible Assets Intangible assets are those assets of a company, which have no physical existence. Myers s, “These assets have no set monetary value and no physical measurement”. Intangible assets are of great importance for the success of companies although they cannot be seen or touched. They are shown under non-current assets on a company’s balance sheet. Intangible assets can be further classified into definite and indefinite assets. “Definite assets are those that last for a particular amount of time, like contract agreements” (Myers, 2011).

On the other hand, indefinite assets, such as, brand name of a company, have no specific time of existence; rather they last for an immeasurable amount of time. Intangible assets can also be classified into legal and competitive assets. Let us discuss legal and competitive assets in some detail in order to get a better understanding of intangible assets. Legal or Identifiable Competitive Assets Legal assets can be identified easily as compared to competitive assets. Some of the major examples of legal intangible assets include copyrights, trademarks, trade secrets, patents, and intellectual properties.

Intellectual property is an idea, emotion, or any asset that an employee creates for his or her company. Intellectual properties do not belong to the employees who invent them; rather they actually belong to the companies for which the employees create those properties. Intellectual property is an intangible asset, which belongs only to the company, which invents it. Stealing the intellectual property of a company for personal use is a crime. A patent is a right, which the government of a country grants to the inventor of the intellectual property for a limited amount of time.

A trademark is a unique sign that protects the names, symbols, and words that are used to distinguish the goods and services of one company from those of the other companies. A difference between trademarks and patents is that trademarks are renewable as long as they are in use whereas patents provide the rights for up to twenty years. Copyright is another form of protection, which protects all published and unpublished intellectual works of the companies. The last type of legal assets, which is trade secrets, provides protection to the methods, formulas, strategies, and processes that a company uses to run the business activities.

Competitive or Unidentifiable Intangible Assets Competitive assets differ from legal assets in a sense that legal assets are created or invented by a company whereas competitive assets are gained by experience. Some of the major examples of competitive intangible assets include reputation of the company, leveraging, and experience. Competitive assets help a company gain competitive edge over other competing firms. These are the assets, which become more and more valuable with the passage of time.

A company needs to improve its business processes in order to improve or enhance the value of its competitive assets. Summing it up, intangible assets are long-lived assets that represent a company’s certain legal rights and competitive advantages. A company needs to protect its tangible as well as intangible assets in order to ensure success in any competitive market. References Myers, J. (2011). What are Intangible Assets?. Retrieved from http://www.wisegeek.com/what-are-intangible-assets.htm