Measuring Intangible Assets - Apple, Inc Essay Example | Topics and Well Written Essays - 1000 words

Measuring Intangible Assets - Apple, Inc - Essay Example Tangible assets are fixed assets, which have physical substance and are held for use in the production or supply of goods and services such as lands, buildings, plants, and equipment. An intangible asset is an identifiable non-monitory asset without physical substance (Weetman 2010). Examples of intangible assets are trademarks. This essay will examine patients and brand names more thoroughly. One of the most challenging principles of accounting is the recognition of intangible assets, such as trademarks and patents, and a company’s reputation in its financial statements and balance sheet. In addition, these assets are considered â€Å"non-mentionable† or in another sense â€Å"unrecognized† in the balance sheet due to the failure of the rule of recognition in measuring the cost of the asset. The conventional argument is that the company gains nothing from the intangible asset, such as reputation etc. However. intangible assets can some of the largest assets a company’ acquires. They are also one of the major factors in generating future profits. This essay investigates the value and the importance of intangible assets for Apple Inc. After conducting research and examining its annual report Apple Inc. held considerable interest for me. Apple Inc is considered the most valuable company in the world with a market capitalization of $346 billion (James 2011). One considers whether the world’s number one company has recognized their reputation in the balance sheet and whether the confidence of their consumers over the years has been recognized in the company’s financial division. After examining the company’s annual report I could locate this asset on the company’s balance sheet. Apple’s brand is valued at $153 Billion ("Trademark a name:" 2011); this is almost half of its market capitalization size and is recognized as â€Å"unmeasurable† intangible asset of its trademark, which includes its reputation.