Tangible vs Intangible: Difference and Comparison

The human senses perceive stimuli from outside that helps create an impression of touch, taste, see, hear, or smell.

This human sense helps in perceiving things we cannot comprehend. We can broadly classify our assets into tangible and intangible.

Tangible are assets that we can perceive with our senses, and these assets have a physical existence. The intangible assets have no physical presence, and we cannot comprehend these assets.

Key Takeaways

1. Tangible refers to something that can be touched or physically experienced, while intangible refers to something that cannot be touched or physically experienced.
2. Tangible assets include property, equipment, and inventory, while intangible assets include patents, trademarks, and copyrights.
3. Tangible goods can be easily bought and sold, while intangible goods are more difficult to value and transfer.

Tangible vs Intangible

Tangible is a term that is used to describe something that can be touched, felt, or physically measured. Intangible is a term that is used to describe something that cannot be touched or measured physically, such as ideas, emotions, or experiences. So intangible relates to things that are abstract.

Tangible is real and has value. It can be touched and have a form and substance. It can be visually comprehended and can have a clear mental image of physicality. A few examples of tangible is the Leaning Tower of Piza or a car.

Intangible is something that exists, but we cannot touch or feel it. The description of the product is your creativity.

It can express a person’s feelings or quality, and intangible assets add value to a business but do not exist in the real world. A few examples of intangible are goodwill, patent, or trademarks.

Comparison Table

Parameters of Comparison	Tangible	Intangible
Property	We can perceive tangible objects. It has physical existence.	We cannot see, feel, or touch intangible objects. It does not have physical existence.
Cost factor	Tangible cost is read money paid for service.	Intangible cost can be considered as knowledge gained.
Product	It is a physical object like an asset or anything visible.	It is a product that is indirectly perceived.
Value	The value of tangible goods has reduced over the years.	Intangible asset value appreciates till the date of expiration.
Example	Furniture, machine, inventory.	Patents, copyrights.

What is Tangible?

Tangible is the Latin word ‘tangere,’ which implies ‘to touch’ It suggests touch, feel or see, basically experience with our senses. The company’s asset can be physically seen and even valued.

The grief of a person can be visible and sensed by the onlookers. Hence tangible need not specify only physical presence but even real factual facts visible. 

The word tangible is an adjective that means concrete and not imaginary. A few basic descriptions are as follows:

• Anything which has a sensory feel is actual and not an imaginary object. 
• It is definite, not vague.
•  As it has physical existence, real estate can be valued.

The following are a few examples of tangible:

• Tangible benefits like an increase in salary or shorter working hours.
• Tangible evidence to file a lawsuit or take legal action.
• The tangible evidence of improvement seen on the highway is improving the drive.

In a consumer setup selling a tangible product is a direct experience. The consumer can smell, taste, and touch before buying the product.

You can test drive the car before buying. These are tangible experiences of the product.

Packaging plays a crucial role in the experience for a consumer. It can not be possible to taste or smell the product.

The external appearance of the product plays a magical trick for the consumer. A Tangible is something with physical existence, and we don’t need to imagine objects.

What is Intangible?

The word origins from the 17th century from French or Medival Latin ‘intangibilis.’ Intangible implies incapable of being touched and does not have a physical form.

The form or description of the object is our imagination. Intangible is also valuable, but accessing the value is different from tangible assets.

The word intangible is an adjective. A few basic descriptions are as follows:

• It is impossible to touch or ascertain the value.
• It can be an influence that benefits you.
• It is a feeling or a quality of a person.

The word intangible in the accounting world is value. This value is equally crucial for the well-being of the business but does not exist in its physical form. To name a few are Bonds, Copywrite, and patents.

The word intangible is a noun that means something that exists. A few basic descriptions are as follows:

• It is existential but cannot be described.
• It is a property like goodwill that adds value but has a physical form.

The following are a few examples of intangible:

• Creativity and Dedication are the intangible quality we are looking for in our employees.
• Her leadership qualities are intangible assets for the organization.
• Underestimating the value of intangibles will cost the company’s reputation.

In a consumer’s world, an intangible experience called services is a glossy image. Insurance, consulting computer software, investment banking, and forwarding are a few intangible experiences.

To pen it all down, a consumer can visit a travel website before booking. They can view the room, review the reviews, and have an imaginary holiday based on the description provided by the website.

The key to success is to merge the intangible and tangible experiences to get the business rocking. Intangible is imaginary with no physical form. The value of intangibles cannot be neglected. 

Main Difference Between Tangible and Intangible

1. The word tangible means physical. Intangible does not exist in physical form.
2. Tangible benefits are measured in financial terms. Intangible benefits cannot be measured in financial terms.
3. A tangible product can be perceived by touch or smell. For example, a ball or a building. An intangible product can be only perceived indirectly. For example, an insurance policy.
4. Tangible costs are obvious costs that occurred. Employee salary and buying equipment are all tangible costs. Intangible costs are equally important as they are the base of your company. Staff members take time to adapt to a new work system or a new technology.
5. An example of a tangible is the Taj Mahal or a car. An example of an intangible is intellectual property, the goodwill of the company.

References

1. https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1350-0775.2004.00453.x
2. https://www.jstor.org/stable/2491314

Last Updated : 13 July, 2023