http://www.economist.com/news/business/21614153-sometimes-you-see-brands-balance-sheet-sometimes-you-dont-untouchable-intangibles

Intangible asset is an identifiable non monetary asset without physical substance, like brand, goodwill, patent, computer software……It is generated internally, and, will not be recognized in the accounts. However, when the company is purchased, the value of intangible assets should be shown in the balance sheet. This is because the disclosure of intangible asset will be helpful for evaluating the value of the company. If a company is very famous, and the brand name worth a million dollars, it is unfair to sell the company without adding the value of the brand.

Brand values can “swing wildly”. Intangible asset is not a physical item, therefore it is hard to identify an accurate value of intangible asset. Sometime the book value of the intangible asset can be maximized, causing a huge difference between the actually value, so that the shareholders can gain more profit from acquisition.

Valuing the intangible asset is not easy. It requires a lot of market research and evaluation. The depreciation of assets should be taken in account as well.