Why do companies invest in Intangible Assets?


Intangible assets are anything that doesn't have a physical form, like trade secrets, patents, and customer lists. They're important to companies because they give them an edge over their competitors. Intangible assets can also be helpful in generating new revenue.

There are a few reasons why companies invest in intangible assets. The first is that intangible assets can be more valuable than tangible assets. For example, a company may have a patent that gives it an advantage over competitors in the market. A second reason is that intangible assets generate new revenue. For example, a company may develop a new product using its intellectual property and sell the product to other companies. This generates new income for the company.

Intangible assets are also important for protecting the company's brand. If a competitor acquires the company's intellectual property, the company's brand may be harmed. Intangible assets also protect the company from lawsuits. If someone alleges that they injured their leg while using the product of another company, filing a lawsuit would likely result in losing the case because of the intellectual property involved.