Intangible assets (nemateriālie ieguldījumi)

Intangible assets (nemateriālie ieguldījumi, officially translated as intangible investments) are non-physical items, other than financial assets, that can be separated from the company or arise from a contract or other rights, and that the company expects to use for more than a year for economic benefit.

They are the first group of long-term investments on the balance sheet: development costs; concessions, patents, licences, trademarks and similar rights; other intangible assets; goodwill; and advance payments for intangible assets.

Not everything may be capitalised. Formation expenses and research costs are expensed in the year they arise, and only rights acquired for consideration may be shown as concessions, patents and licences. Development costs may be capitalised, but then profit may not be distributed unless reserves and retained earnings at least equal their unwritten value.

Intangible assets are written down over their useful life. The law calls it write-down of value; Latvians often say amortisation.