Intellectual property (IP) encompasses intangible creations of the mind that hold economic value. IP law protects these creations, encouraging innovation by allowing exclusive commercial exploitation.
IP assets like copyrights, patents, and trademarks are vital for businesses, enabling them to generate income and enhance their market value while safeguarding their creative endeavors from competitors.
Although not always visible on balance sheets, IP can be classified as non-current assets, reflecting long-term investments. Companies can monetize IP through licensing, creating ongoing revenue streams.
Amortization of IP assets like patents is crucial, allowing businesses to account for their declining value over time. This process can significantly impact taxable income, providing tax benefits.
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