Why is it bad to evaluate material things

Tangible and intangible goods


Tangible and intangible goods are assets that are listed on the balance sheet of companies. It can be a matter of material objects as well as rights and intellectual property.

Intangible goods are included not physically, so not physically tangible. In contrast, material goods can actually be touched and physically changed become.

What are material goods?

All economic goods can be divided into the categories "material"Or"immaterial“Classify. Material goods are also called Goods or material goods designated. In the accounting sense, the goods can either be sold or used for the further course of production. In contrast to a service, the material value or material production of the goods is in the foreground. Examples of material goods are:


  • Raw materials such as gold, wood or metal
  • Production facilities such as offices or the company premises
  • Smaller production tools such as screwdrivers, nails or paper
  • End products that are sold to end users such as bread, computers or books

What are intangible goods?

Intangible goods are not material and cannot be touched in everyday language. It is therefore about Services or Rights. In particular, intellectual property such as Usage rights of music and films or patents are to be understood under the aspect of intangible goods. Like tangible goods, intangible goods must be included in the balance sheet. Examples of intangible goods are:


  • Patent for a new type of water pump
  • Services such as visiting the hairdresser
  • Sales and usage rights to texts, images, music and videos
  • Insurance, Loans, and Stocks
  • Legal advice, medical assistance, overnight stay in a hotel

similarities and differences

Both from an economic and a legal point of view, tangible and intangible goods have some things in common. Intellectual property can be just like property sold and transferred become. At the same time, rights of use to both types of goods can be restricted by the legislature. Physical access to material goods is simply denied or released. Intangible goods can, for example, be restricted in their use through compulsory licenses in patent law.

From a legal point of view, intangible goods are sometimes difficult to handle. you are omnipresent, which is why intellectual property can be subject to different legal systems. Globalization also means that intellectual property rights have to be registered in different countries, even though they were only developed in one country. If a company creates material goods, however, it is clear where these goods were developed, produced and ultimately sold.

From an economic point of view, intangible goods are interesting insofar as any number of people can use the same good at the same time. It is possible to play a video in New Zealand and Germany at the same time. On the other hand, if a consumer buys an apple, only he can consume the piece of fruit. The production of intangible goods is therefore only worthwhile for companies if there are technical or legal possibilities Exclude third parties from using the goods. A video is therefore sold on a physical data carrier or via Internet platforms, for example, and is protected from being passed on free of charge by means of copy protection.

Accounting for economic goods

In September 2009, the unequal treatment of tangible and intangible assets in fixed assets, which had previously been in effect, was abolished. Since then, intangible objects have also had to be accounted for become. As with material goods, the assessment basis is Manufacturing costs, purchase prices and the useful life.

The review intangible assets in practice, however, is often anything but trivial. For example, how should the brand potential of Apple or Google be accounted for? As a rule, the brand is first clearly defined as such and separated from other assets. The company or auditing company then checks how the rights of disposal and exploitation of the brand are specifically divided. If, for example, there are several owners, a company cannot have the entire brand value on its balance sheet. The brand is then evaluated, among other things, on the basis of the profits achieved through the use of the brand rights.

In practice, three methods have prevailed for the valuation of intangible assets:

  • Market value-oriented procedure
  • Cost-oriented process
  • Income-oriented process
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The article "Tangible and intangible goods" is in the category: Goods