1: intangible liabilities definition
2: how intangible liabilities works
3: intangible liabilities vs intangible assets
4: example of intangible liabilities
Opening information:
Intangible liabilities sentence breaks into two words intangible and liabilities, intangible means non physical item of one thing, liabilities means debts which are accounted in the finance.
Intangible liabilities means debts of non physical assets which not seen and touchable by the people’s, so now let’s have a look what is a intangible liabilities,
How the intangible liabilities works in the public market for all Corporate Industries, and what is the difference between intangible liabilities and intangible assets, finally one clear example about the intangible liabilities.
1: intangible liabilities definition
One of the person name Mr.kutiy which is You Tuber who got copyright for hundreds and thousands of videos and release the movie and album video songs with a copyrights license.
Mr.kutiy goals is to released at least more than a 300 videos per years, which cost him hundred thousand dollars, but last year it’s cost more than that, which is around a half million nearly
He only had a 200 thousands dollars by his YouTube business income, and the remaining of 300 thousands dollars are accumulated by the bank loan as a debt.
He take a bank loan by using his YouTube business income for paying and bought the copyright for more new released videos.
This helps his business grow fast and achieve more subscription within very short amount with maximum effort.
After the 2 years his business had grown 300 percent and he actually paid the 45 percent of the his loan taken for paying the copyrights.
He had only 55 percent of the loan remaining to close his business liabilities, here this debt of liability is called as a intangible liabilities, because Mr.kutiy debts are taken for copyrights which didn’t touchable physically.
Therefore such debts which are aeries for a intangible things are called as intangible liabilities, so now let’s dive into know how this intangible liabilities are identified.
2: how intangible liabilities works
Intangible liabilities doesn’t represent any single amount of the liabilities instead intangible liabilities refer the idea of one concept which shows the debts which owes for acquiring the intangible assets.
If the debts which are not used to pay or acquire or merge the intangible assets, then they are not considered to be as intangible liabilities.
Particularly liabilities comes from the concept of debts, when such debts are created from the intangible assets they are considered as intangible liabilities.
In balance sheet of the company, never intangible liabilities which are written or accounted as a intangible liabilities, instead they are accounted inside the company where each of the debts are paid what are remaining to pay as debts too.
Not all the debts are listed in the balance sheet of the company, despite they are collectively accounted as a current and non Current liabilities based on the terms of the difference.
When one business acquire other business patent of intellectual property from taking debt or loan from the bank with interest which that debt are considered as a intangible liabilities.
Then when one Industry need copyright from any other products or service from the other 3rd parties or business and when such copyrights requires millions of dollars which also leads the business to take debts for such copyright, it’s categorized as a intangible liabilities.
Moreover most of the people’s confuse and say that any thing which are non touchable physically are a assets or debts, because they are not determined as a simply from the liabilities, in spite they are created from the liabilities.
Most of the people’s confuse the intangible liabilities and intangible assets, so let’s jump into know the key difference in it anyway.
3: intangible liabilities vs intangible assets
The difference between intangible liabilities and intangible assets are, intangible assets are the one which are refer the assets which non physically seen and touchable.
And the intangible liabilities are the one kind of debts, which are came from the intangible assets alone.
The key difference between the the intangible assets and intangible liabilities are the intangible liabilities are accounted from any of the intangible assets, To make you more clear about the intangible liabilities let’s seen into one clear example below.
4: example of intangible liabilities
Say the company G are the one which had 52 millions dollars in a debt of liabilities, which that liabilities are the one didn’t came from one debts, it’s a collection of three debts.
One debt from the bank loan, other debt from the Bonds securities, final debt from the copyright while acquiring the other company.
Here the debts which are involve in the copyright is called as a intangible liabilities, because the copyright is a intangible assets which is came from the acquiring.