Intellectual property, or IP, is protected via patents, trademarks, and copyrights. Getting your IP registered to a public database is your first step in securing your claim to use it exclusively. However, when assessing the value of your idea and branding, you must determine what counts as a capital asset.
What is a capital asset?
Tangible assets are those that are visible or able to be touched. Though IP is intangible, it’s labeled a capital asset because of its intrinsic value to a company. A business that has its brand, philosophy, or idea stolen has firsthand experience of how valuable IP is. For such reasons, IP can be considered a capital asset like stocks and bonds.
Use in a company’s balance sheets
The market value of the intellectual property can be listed in a company’s balance sheet. Intellectual property that’s purchased by a company is accounted for because its acquisition had a cost involved. What the capital asset IP is worth must be recorded at or below its accepted value. Here are the two forms of IP that are used within a balance sheet:
• Patents: The value of a patent is set by its purchase price or what was received by selling it.
• Copyrights: Likewise, copyright has value because the ownership of such property can be changed, bought or sold.
Intellectual property in Texas
Making a case for intellectual property is easier when such property is accounted for. Through balance sheets, purchase orders, or sales, anyone can build a general argument regarding the value of their IP. Such property can be valued as a capital asset because of how much others are willing to pay for it. Additionally, the role that intellectual property plays in a business might be substantial.