What you need to know about intangible assets before you internationalize your business

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The chair you’re sitting on now, the computer where you’re reading this text, the suite where your office is located: all these things can be seen and touched, so you do not question whether they have value. Due to their materiality, these assets are considered tangible and naturally enter into the calculation of the estate of a company. But what about the software used in the company, the registered trademark, your client portfolio? How to calculate their value?
Because they are not palpable, some assets are not accounted for are not included in the company’s financial statement, which can cause great losses for your company. Among these assets, we highlight:

  • Brands
  • Licenses and permits
  • Copyrights
  • Softwares
  • Technology development
  • Patents (recipes, formulas, etc.)
  • Client portfolio
  • Human resources
  • Know-how
It is important to know all the assets of the company before starting the internationalization process

In this sense, even companies that market products have to be aware of their intangible assets. If your company uses management software or image editing ones, for example, then these are considered to be intangible assets—thus part of the company’s equity. Moreover, the brand of your company has an important value not only in the financial aspect, but also in relation to its reputation in the market.

Both a company’s tangible and intangible assets have economic value, so they can be traded, transferred, sold or leased. For this reason, everything that the organization has should be described in the financial statement, which demonstrates the accounting, financial and economic situation of the company within a certain period.

Intangible assets must be accounted for in this list because, since the enactment of Law n. 11,638/2007 in Brazil, they are classified as assets and, more specifically, as long-term assets. However, it is worth remembering that they are only recognized as such if:

  1. The calculation of the asset’s value is possible and reliable;
  2. The asset’s benefits for the company are verifiable;
  3. The asset is separable from the company’s estate, that is, it can be traded, transferred, sold or leased.
Keep your financial statements up to date to get rid of headaches!

It is important to know everything that the company possesses not only to keep up with the financial health of the organization, but also to document the estate in cases of mergers, acquisitions or the sale of the company, creation of franchises, arrival of new partners or departure of old ones, and even in the dissolution of a society.

Understanding the width of your company’s equity and accounting for all tangible and intangible assets is a very important step for the entrepreneur who wants to internationalize their business. Remember that the collection of taxes on company estate varies in each location in the United States, so updating the company’s financial statement is essential to take a saf first step toward the US.