Technical definition
An identifiable non-monetary asset without physical substance, such as certain patents, licenses or software rights.
How it works
Recognition requires control, expected future benefit and reliable measurement under the relevant framework. Finite-life intangibles are amortized; indefinite-life items are tested under the applicable impairment rules.
Everyday example
A separately purchased five-year software license is recognized as an intangible asset and amortized over its useful life.
Common pitfall
Not every valuable idea, brand or employee skill qualifies; identifiability, control and recognition rules matter.