Lecture 8
Intangible resources and intangible assets
8.1 Concept and characteristic of non-material assets
Non-material assets are assets, which have no physical expression, but nevertheless represent essential value for the enterprise.
Objects of non-material assets should correspond to the following conditions:
1. Absence of material (physical) structure;
2. Possibility of identification, singling out by the organization from other kinds of property;
3. Usage in production manufacturing, when performing work or rendering services or for administrative needs;
4. Use of them for a long time, that is during the term of paying usage, with duration over 12 months or a usual operational cycle if it does not exceed 12 months;
5. Ability of bringing to the organization economic profit (income) in the future;
6. Absence of the organization intention to resell them;
7. Availability of properly processed documents, which confirm the existence of the asset and the exclusive right of the organization for the results of intellectual activity (patents, certificates, other protective documents, the contract of concession (purchase) of the patent, trade mark, etc.).
As non-material assets are incorporeal by nature the important criterion of reference of this or that object to the given category of property is also its alienability. With reference to non-material assets alienability means the possibility of transferring an object as such into the property of another person.
Intellectual and business qualities of a citizen, his (her) qualification and ability to work cannot be acknowledged as non-material assets since they cannot be alienated from the citizen and transferred to other people.
Structure and classification of non-material assets
Objects of the intellectual property, business reputation of the organization (goodwill), organizational charges belong to non-material assets (fig. 1).
The intellectual property. The generalized concept of "the intellectual property" includes "the rights concerning literary, art and scientific products, performing activity, inventions, discoveries, industrial samples, trade marks, service marks, company names and commercial designations, protection against unfair competition, and also all other rights concerning intellectual activity in industrial, scientific, literary and art areas".
In economic activity of the enterprise intellectual property can be used in economic activities of the enterprise as "non-material assets".
The following rights belong to objects of the intellectual property: the exclusive right of a patent holder to the invention, the industrial sample, useful model, selection achievements; the exclusive copyright to computer programs, databases; the property right of the author, of another legal owner to topology of integrated microcircuits; the exclusive right of the owner to the trade mark and the service mark, the name of the place of origin of goods.
Inventions and useful models are considered as technical solution of a problem.
The industrial sample is understood as the art design of a product which determines its appearance and corresponds to established requirements.
The computer program is an objective form of providing a data set and orders which are intended for functioning of the computer and other computer devices with the purpose of receiving a certain result.
Figure 8.1 Structure of non-material fixed assets
The database is an objective form of presentation and the organization of the data set, which are systematized in such a way that these data could be found and processed with the help of the computer.
The topology of integrated microcircuits represents the spatial and geometrical arrangement of the set of elements of an integrated microcircuit and connections between them which are fixed on the material carrier.
Trade marks, service marks, names of places of origin of goods are designations or the names which serve for differentiating goods or services of other manufacturer, for differentiating goods which possess special properties.
The trade mark and service mark represent an element which promotes differentiating goods and services of some legal person or citizens from the homogeneous goods and services of other legal people or citizens. Trade marks can be verbal, graphic and volumetric and represent other designations or their combinations in any color or color combinations. Trade marks specify who bears the responsibility for quality of goods which are offered to the population.
According to experts evaluation, under conditions of the advanced economic system the property of the enterprise consists of non-material assets by 30-60 %, and the trade mark in their structure can occupy about 80 %.
The name of the place of origin of goods or services is always the geographical name of the country, region, and district, settlement where the product or service is made.
Organizational charges include fees to lawyers for drawing up constituent documents, services for firm registration and so on, which are being carried out at the moment of creating the firm. Charges for renewal of constituent documents, making new seals and stamps are not included into the structure of non-material assets.
Such kind of non-material assets as business reputation (goodwill) appears at the enterprise only in case if it (the enterprise) has accomplished the purchase of another enterprise. Business reputation can be defined as the difference between the purchase price of the obtained enterprise and the cost of all its assets and liabilities (obligations) on its accounting balance.
According to the degree of legal security one part of non-material assets belongs to those which are protected by protective documents (copyrights), the other part belongs to the category which is not protected by protective documents (copyrights).