Is Trademark an Intangible Asset?

An intangible asset, simply put, is something of value that is without physical substance. To assess the value of an intangible asset as an intellectual property, the first step is to register it with the relevant authority to verify statutory law protection. It's critical to remember that the protection of intellectual property rights must be a key aspect of intangible asset management. When a company protects its property rights by registering, licensing & litigating them, these intellectual property rights become more valuable.

Trademarks are essentially intangible assets that prevent others from using a company's name, logo, or other branding elements. It is a design, sign, or logo associated with a specific product or company. The brands that already exist in today's market have become more abstracted, and they've done a good job of it. The image, reputation, character and other elements of businesses are all essential. In today’s market, a brand's logo is the symbol of their identity. The brand helps to identify and differentiate them from their competitors by using its image, character, identity, etc.

When Micro, Small, and Medium Enterprises (MSMEs) have their trademarks registered, they can use it to legally block their rivals. Trademarks are important in protecting an MSME's brand and maintaining a good relationship with consumers. The trademarks allow them to increase the value of their intangible asset as a way to obtain monetary gain from numerous financial institutions. A registered trademark can protect an MSME's logo from a lack of status and strengthen some of its consumers' connections.

How is Trademark accounted for as an Intangible Asset?

If a firm purchases another firm's trademark, the money paid for it is recorded in a general ledger intangible asset account. The trademark account is used to record expenditures associated with defending a mark. It is important to note that a business can only include the development cost of a trademark in its books of account. However, not all costs of development qualify for capitalization of a trademark.

Intangible assets are usually depreciated over a period of time corresponding to their anticipated productive life. Trademarks, on the other hand, are not devalued since they have no expiration date and retain their value forever. This can be assured by regular Trademark Watch to reassess if the value of your trademark has impaired overtime due to variables in the market.

“Any CEO who cannot clearly articulate the intangible assets of his brand and understand its connection to customers, is in trouble.”
- Charlotte Beers

Intangible assets are very difficult to evaluate. When it comes to determining a company's total asset value, accurate intellectual property valuations are essential for a business's accurate evaluation. To make sure these hidden intellectual property assets are included in your negotiation strategy, it is best to seek legal advice by professionals that are equipped with proactive overall trademark strategies & solutions. Let Global Trademark Company be your guide for the same!