Understanding the meaning of an intangible asset

Plainly speaking, an intangible asset is an identifiable non-monetary asset without physical substance. This should be fairly obvious from the name ‘intangible’. What this means really is the fact that you cannot touch or physically grasp the asset. What however is required prior you can talk of an asset is the requirement of identifiability – the company must be able to separate it from physical substance for an example and it must be ‘usable’ all on its own.

I guess what confuses the most is the identification of an asset – do we have an asset? An asset according to IAS 38 is identifiable if it either is separable or being capable of being separated from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable asset or liability, regardless of the fact whether the entity intends to do so; or it arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations. If either of those conditions is met, the company has an identifiable asset.

Another condition that must be achieved is the control over an asset. The company has an asset, if it’s able to control the future economic benefits flowing from the resource and also the ability to restrict access of others to those benefits. Usually control arises from legal contracts or similar documents, however if the company is able to prove that control is in fact present by other means, then it’s expected and accepted.
When understanding the sheer meaning of the word ‘intangible’ is not a problem perhaps, the initial criteria for speaking of an asset are somewhat harder to grasp in my opinion. Be very careful and thorough when assessing the existence of an asset and do consult with appropriate guidelines applicable your reporting framework.