This glossary uses Visual Finance™ to bring financial terms to life. Each example shows data from the Round Number Company, a fictional business with simplified figures to make learning easier. For more details, visit 'How to Read Visual Finance'.
An Intangible Assets that arises when a company is acquired and the purchase price is more than its Book Value.
The value of an Intangible Asset can be amortized over time, the Amortization is reported is reported alongside Depreciation on the Income Statement.
The amortized value must be re-evaluated on a periodic basis; if the recoverable value of the asset falls below the value listed on the Balance Sheet, an Impairment loss is recorded on the Income Statement.
The above is our generic explanations of common corporate financial terminology. Actual meanings can vary widely from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"