Tangible assets

Assets that have a physical existence, or give the holders definite set of financial rights are classified as tangible assets, as opposed to intangible assets such as patents and goodwill. Examples of tangible assets include land, machinery, bank deposits and investments.

The distinction between tangible and intangible assets is made on the balance sheet, where a breakdown of fixed assets as tangible or intangible is provided.

There is also a slight difference in the treatment and terminology used to describe the matching of the cost of an asset to its useful life. Tangible assets are depreciated or (more rarely) depleted. An intangible asset is amortised.

Both tangible and intangible assets may be impaired, but intangible assets are more likely to be regularly reviewed (this is required for goodwill).

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