Difference Between Tangible and Intangible

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

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This human sense helps in perceiving and a few 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 there is a physical existence to this asset. The intangible assets have no physical presence, and we cannot comprehend these assets.

Tangible vs Intangible

The difference between tangible and intangible is that tangible is anything that has physical property and physical existence. We can feel it with our senses. Intangible does not have any physical presence or existence. It is not possible to feel, see or touch it.

Tangible vs Intangible

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 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 be expressing the feeling or quality of a person, 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 ComparisonTangibleIntangible
PropertyWe can perceive tangible objects. It has physical existence.We cannot see, feel, and touch intangible objects. It does not have physical existence.
Cost factorTangible cost is read money paid for service.Intangible cost can be considered as knowledge gained.
ProductIt is a physical object like an asset or anything visible.It is a product that is indirectly perceived.
ValueThe value of tangible goods reduces over the years.Intangible asset value appreciates till the date of expiration.
ExampleFurniture, 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 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 actions.
  • 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, 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. Tangible is something with physical existence, and we don’t need to imagine the 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 the physical form. To name a few are Bonds, Copywrite, 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, 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 go through 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 cost occurred. Employee salary, buying equipment is all tangible costs. Intangible costs are equally important as they are the base of your company. Time is taken by staff members to adapt to a new work system or a new technology.
  5. An example of tangible is the Taj Mahal or a car. An example of intangible is intellectual property, 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
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