Page 11 - Ebook Financial Accounting 3

1.2. The Difference Between Tangible and Intangible Non-current Assets

Basic of Tangible Assets Intangible Assets

Difference
Meaning Those assets which can be touch, Those assets which cannot be

feel and see. touch, feel and see.

Length of period The period of getting benefits from The period of getting benefits
of usage these types of assets are more than from these types of assets are

from one-year financial year. less than from one-year
financial year.

Physical This type of assets has a physical This type of assets has not a

Existence existence. physical existence.
Depreciation or This type of assets (except Land) has This type of assets has

Amortization depreciation according to time. amortization according to time.

Able to liquidate These assets can be liquidated These assets cannot be
easily as compared to Intangible liquidated easily as compared to

assets because they have a physical Tangible assets because they
existence. don’t have a physical existence.

Financed This type of assets can be financed. Most of this type of assets
cannot be financed.

Calculation of The calculation of BV of these types The calculation of BV of these

Book Value of assets is very easy. types of assets is very difficult.
e.g: Calculation the amount of

goodwill, there is the number of

methods is available.

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