intangiilsete

Intangiilsete, in Estonian accounting and finance terminology, refer to intangible assets. These are non-physical assets that a business controls as a result of past events and from which future economic benefits are expected to flow. They are identifiable either because they are separable (can be sold, transferred, licensed, or rented separately) or because they arise from contractual or legal rights.

Recognition and measurement

Intangible assets are recognized when it is probable that the expected future benefits will flow to the entity and the cost of the asset can be measured reliably. Initial recognition generally occurs at cost. Purchased intangibles are recorded at their purchase price plus directly attributable costs. Internally generated intangible assets are handled differently: research costs are typically expensed, while certain development costs may be capitalized if specific criteria are met.

Examples

Common examples include patents, trademarks, copyrights, licenses, software, databases, brand names, franchise rights, and customer relationships. Goodwill arising from a business combination is also considered an intangible asset, but it is not identified separately from the acquired business’s other assets.

Measurement after recognition

After initial recognition, an entity may choose a cost model (carrying amount = cost minus accumulated amortization and impairment) or, if there is an active market, a revaluation model. Intangible assets with a finite useful life are amortized over that life; those with indefinite useful life are not amortized but are tested for impairment annually or when indicators arise.

Impairment and derecognition

Impairment occurs when the asset’s recoverable amount is less than its carrying amount. Assets are derecognized on disposal or when no future economic benefits are expected. Intangible assets are governed mainly by international standards such as IAS 38, with local variations in reporting and taxation.