Module I· Goodwill, Intangibles & ImpairmentBasic
Question
What are intangible assets (intangibles) and what categories are there?
Answer
What
Non-monetary, identifiable assets without physical substance (IAS 38).
Main categories
- Customer relationships: 5-15 years, often from PPA
- Technology / patents: 5-20 years
- Trademarks / brands: indefinite (Coca-Cola) or 5-25 years
- Software: 3-7 years
- Licenses, rights: contract term
- Order backlog: 1-3 years (PPA only)
Distinction from goodwill
Intangibles have a definable useful life; goodwill is indefinite.
Accounting
Intangibles → amortized. Goodwill and indefinite-life assets → impairment test only (IFRS).
Pitch tip
PPA negotiation: the more you allocate to identifiable intangibles vs. goodwill → higher D&A → lower EBIT.