Argument Of Tangible And Intangible Resource Accounting Essay

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The economy is developing with many types of business, especially technology with high innovating and fast paced market. The advantage and high demand leads to strong competing among this course of business. In reality, the developments of fast paced technology nowadays are drive by intangible and intangible resource which plays the decision and important role in the sustainability. The relationship and combination of tangible and intangible enhances the competing of business that includes working skill, organization, strategy, business methods, brand, property, asset… It all draws the reality in remaining and developing the resource in order to help organization in technology to improve the quality and make the good competitive advantage for the market. The importance of tangible and intangible assets toward a technology and innovation driven one, especially with intangible asset investment are becoming vital to economic growth and stability. Just as physical assets were used to finance the creation of more physical assets during the industrial age, intangible and tangible asset should be recognized and used to finance the creation and innovation in information age, especially it will make a good foundation for the competition like many companies like Samsung, Apple, Google has done well with the competition. The good recognition and driving in controlling and managing the resource will help management and organization go up with the century of technology , especially to approach better and provide quickly service to the demand of customer.


Argument of Tangible and Intangible resource

In reality, tangible and intangible resources are related to each other and it supports for other. In other word, intangible is more important and requires good tangible to get successful in business, especially in fast paced technology today. Tangible resources are very simple to be defined and realized that includes all hard assets recorded on a company, organization. Those assets are generally segmented base on the expected useful life and that all are component and foundation for the development of company, especially to enhance the quality of intangible resource. Tangible asset includes short term and long-term assets. Short term is those expected to be held for less than one year, include something like cash, securities, inventory… In other hand, long-term asset are anticipated to be held for more than one year and generally include manufacturing plants, real estate, equipment and other long-term asset. It's very meaningful and important in production development, especially for the strategic management in setting plan and remains intangible asset.

The definition in tangible asset can be evaluated and defined easily, opposite with intangible asset is more difficult and requires good ability to control and manage. Intangible asset are something that can't be touched, seen or physical measured. It includes everything that is not physical or investment but its valuable and important for organization. It's a claim to future benefits like customer base, list, strategy , trade secrets, collaboration activities , divided into legal intangible and competitive intangible… In other word, intangible asset is source of value that is generated by innovation, unique type of design, culture , human resource and management practice that plays role for the survive of company . It's often interacting with tangible and financial assets to make corporate value and economic growth in competitive market.

Why Intangible and Tangible resource are important?

The value of those resources are very clear for technology market with many samples from Apply, Samsung, Google … it emphasizes to the ability and value of resource in contributing the advantage for business. The effects of tangible resource are easier and clearer to identify with its role. For those assets are able to be seen or touched, it's the base for company to develop the plan, product and operating business. With all simple things from cash to table, chair, location, it supports for employee and management in being creative with the job and create the stable foundation to expand intangible resource which depends many on tangible. In other word, tangible resource is the basic require for any organization and it's very valuable for any company because it's adjustable and able to change easily more than intangible resource. For the any successful organization, tangible asset is the first thing they need to develop before approach to intangible resource which decides the success or failure for company. Thus, it's very easy to realize that Microsoft, Google, Apply, they all invest very effective to the infrastructure and manufacture asset for any short-term and long-term requirement in order to help employee and management approach to new things to use for business.

In contrast, intangible resource is evaluated more complex and careful with its value and role. Before the industrial revolution, the value of intangible did not evaluated correctly and it concentrated only on result and output. However, nowadays, there is no more supremacy of manufacturing economies; everything is fair and competitive in terms of control scare resource, productivity, market domination… The bloom in technology leads to better recognition of intangible resource that contributes very important and appropriate to creativity, technology innovation, service… Intangible asset is invested more with customer service, human capital, and copy rights, legal activities… to protect the business and create the stable position in market, especially in fast paced technology where everything is changing very quickly and easy to be saturated with the requirement.

Impact of Intangible and Tangible Resource to Technology Market

The appearance of intangible resource creates flexible operations to spring up and it's where resources are talented labor pools existing or where valuable technological partners reside. Intangible resource forces technology business to grow and end up limiting productive operation, it helps to enhance rapid advances in science and technology can incubate and flourish in coordinated or integrated and relatively smaller and flexible enterprises. It's very convenient in the scene that the intangible of know-how or innovation-based relationship drive operational decisions under new tangible resource in the market. In reality, with the development of paced technology today, the phrase like information revolution, knowledge-based economy… are all sprung up to describe the value of technology that gets advantage from intangible resource. The only things is how organization can approach and remain it with highest quality to transform with the economic, market evolution. It's not only for technology market but also for non-technology market where new economy always impact to intangible-focused to harness the advantage of technological productivity , creativity, knowledge-based. It makes the balance for technology market, force organization to make competition that enhances the quality and option of product. Recent financial innovations have better captured intangibles in the markets. But the evolution of technology capital markets that both utilize and support intangibles has been slow. Intangible assets have no standardized financial tools to capture their value. Each intangible asset financing deal seems to be a unique, one-off event employing differing models to determine the assets' value. Basically, the issue concentrates on the ability to change the position with the impact from market. For tangible resource, it can be adjusted and changed in case of the crisis or problem. However, it's not easy without tangible asset or any trouble relates to it. Tangible resource helps to remain the quality of product and operation; it's where the company can base on the draw the plan. It impacts to the operation in case of having new idea for product or service, tangible asset will decide the quantity and quality of project. In other word, if organization has bad tangible asset in short-term and long-term like Cash, inventory, manufacturing equipment, it will contribute to destroy intangible asset and directly down the financial of company. Even tangible asset seems like easy to manage, but the competitive market nowadays does not give any chance for any company lack of knowledge in this section, especially for Cash which is the foundation for any action.

Do Intangibles and tangible matter to Corporate Strategy?

The impact that tangible and intangible resource brings to business includes both positive and negative. It asks for the action from management in setting suitable corporate strategy. At first, many managements and capital market have failed to solve the real problem of valuation, which reduces the attempts in create the positive for financial leverage of asset. In other word, this valuation deficit must be remedied for businesses and especially in technology market to remain viable and sustainable over the long-term. In reality, the problem for corporate strategy comes from the impact of those resources, especially with intangible asset. By including legal intangible like trade, secret, copy rights… it creates the atmosphere for strategy due to change legal and protection of company. The changing legal environment goes along with the development of technology market for segmentation. It's very easy to reflect negatively to the operation of company and destroy the strategy. New knowledge age makes an immeasurably positive effect on the value of patents, one of the major forms of intangible assets that organization must have good plan with tangible asset in order to make right with intangible asset. The experience will decide the success for organization instead of being failure like Samsung has done so far with copy right from Apple during the time of recognizes, and even encourages, the importance of the monopoly rights of patent holders, has also contributed to the increasing value of intangible issue. The technologies are developing and create much benefit that always includes both of positive and negative point. Beside legal issue to matter with strategy, the rapid rise of Internet has made technology often faces with trouble from its advantage. Information technology has moved the business to other type of economic. Last time, the industrial era, tangible asset were the major source of value, however, the bloom in economic always appear with technology, nowadays, the information era information even has more value than intangible assets. Intangible assets like information will different with tangible assets in increasing in value the more people there are who have access to them. It's very important that corporate strategy for any particular company needs to change to fix with the current situation. It requires management to set right plan and issue to go with information or not. Anytime of economic has different way to making strategy. Therefore, the impact are very dynamic and it links together of any purpose for each section.

Most companies are composed of significant amounts of intangible assets in their net worth. But the fact is senior management can realize, recognize and exploit it effectively in right purpose to achieve the good goals for company. Thus, the important factor is how to measure and invest intangible resource correctly by using and innovating the system in evaluating, identifying and recovering all the important consideration for both tangible and intangible.

Remain and Renovate Tangible Resource for long-term development

Tangible asset is an advantage for an organization that has strong foundation from their physical asset. In other word, they are those asset that employee can use, touch and see for business purpose. Therefore, it has different role with intangible asset but still very important and play a decided role in technology market. With the importance from the definition and impact, tangible asset must be recognized its role and value to remain stably to control over physical item to provide good support for other operation. Fast paced technology rapidly develops and the advantage in tangible asset will decide the success for business. Tangible business can vary greatly from business to business, and it's divided into two main categories are Fixed and current. It's very important for company to use right resource for economic purpose, for long-term or short-term investment. Current assets are assets the business has on hand that are flexible and which the company can liquidate fairly easily, such as funds in a business bank account. It's effective in case the company can be able to do investment for some new item and new project. Without those such as cash, funds, it will be less advantageous. Examples in this category include the company's buildings, machinery, land and furniture. Thus, the best way for technology and even non-technology business to control and manage is to have good management and accounting in identifying and managing tangible asset. It means that the department in charge should list the tangible assets separately from any tangible assets on balance sheets and other documentation, usually under a heading such as "plant and equipment" or "plant, property and equipment." They also look at whether the tangible asset is current or fixed. For current assets, they allocate the expense of the asset to the year the business purchased the asset. For fixed assets, they allocate the expense of the asset of the years in which the asset is in use and contributing to the company's operations. It will give the detail for management in suitable investment and remain for right decision and on time project.

Develop Intangible resource for granting competitive advantage