Identifiable assets and unrecorded capabilities
Intangible assets lack physical form but can create enforceable rights or other identifiable benefits. Examples include acquired patents, customer relationships, licenses and technology. Identifiability and recognition requirements matter: an enthusiastic estimate of “our reputation” does not automatically create a balance-sheet asset.
Internally generated spending and acquired assets can receive different treatment. Under US GAAP, R&D is generally expensed, with important exceptions such as certain software-related guidance. Under IFRS, research is expensed, while development spending meeting specified criteria is capitalized. A slogan that “R&D is never an asset” misses these distinctions.
Why acquisition changes the balance sheet
A business may have spent years building customer relationships and technology without recognizing all that value as an asset. When another company acquires it in a business combination, identifiable acquired intangibles can be separately recognized at required values even when absent from the seller's books. This is one reason purchase accounting is not simply copying the seller's balance sheet.
Finite-lived intangibles are amortized over their useful lives and considered for impairment. Indefinite-lived intangibles are not amortized while that classification remains justified, but are subject to impairment testing. “Indefinite” means no foreseeable limit under the assessment; it does not mean guaranteed value forever.
Before interpreting amortization, identify what the asset is, how it arose, its useful life and whether the accounting framework is book or tax. A data field labelled “intangibles” may combine assets with different economics and accounting treatments.