A business either creates or acquires intangible assets. Suppose a company acquires an asset like a patent. All the direct expenditure, such as legal fees, application fees, etc. goes to the income and expenditure statement as an expense. It should appear in the balance sheet as intangible assets are amortised over a period of time.
On the other hand, intangible assets like brand value should not appear on the Balance sheet, nor should they have a recorded book value. In case a company acquires or purchases such an asset, it becomes a part of the Balance sheet as an intangible asset. As said earlier, the excess amount a Company pays over the net asset value becomes an intangible asset and will be shown in the Balance Sheet.
These assets may or may not have an identifiable useful life. Such assets are not subject to depreciation but amortisation on a straight-line basis. The basis for amortisation is their legal or useful life, whichever is shorter.
Intangible assets like goodwill have an indefinite useful life. Hence they are not subject to amortisation. They may be subject to impairment after a proper reassessment. There is an entry of a loss in the income statement in case of impairment of such an asset.