Intangible Capital & Intangible Assets Explained

Intangible Assets vs. Intangible Capital

Although the terms sound similar, intangible assets and intangible capital describe two different, yet deeply connected, sources of business value.

Intangible Assets (Accounting Perspective)

According to international accounting standards, specifically the guidance outlined in IAS 38 on intangible assets, an intangible asset is a non-monetary asset without physical substance that is identifiable, controlled by the business, and expected to provide future economic benefits.

Common examples:

There are several types of intangible assets, and intangible assets including

• Computer software
• Licensing Agreements
• Patents
• Copyrights
• Trademarks and Trade Names

All of which provide legally protected economic benefits.

These assets are measured, amortized or impairment-tested, and reported in financial statements.

Intangible Capital (Economic Value Perspective)

Intangible capital refers to the broader, non-physical capabilities that make a business valuable, things like brand reputation, culture, customer loyalty, data, leadership depth, and systems.

Economic research shows that intangible capital represents a rapidly growing share of modern firm value, as highlighted in this NBER study on the rise of intangible capital. These non-physical drivers, skills, processes, reputation, customer-relationships, now account for more enterprise value than traditional tangible assets.

Think of it this way:

• Intangible assets are what accounting lets you book.
• Intangible capital is the competitive moat buyers are actually paying for.

And this is where exit planning begins to take shape.

The Four Types of Intangible Capital (The Maus Framework)

Maus breaks intangible capital into four practical categories you can strengthen long before you sell the business:

1. Human Capital

Leadership capability, skill depth, employee retention, culture, and succession planning.

A company with strong Human Capital isn’t owner-dependent and doesn’t fall apart when someone leaves.

2. Customer Capital

The stability and strength of your customer relationships: retention, referrals, contract quality, and revenue diversity.

3. Structural Capital

Your systems, processes, documentation, IP, data, and tech stack, everything that lets your business run without you.

This is a major driver of transferability and long-term enterprise value.

If you're unfamiliar with how buyers evaluate this characteristic, here’s a complete breakdown of transferable value and why it matters during an exit.

4. Social Capital

Brand reputation, partnerships, supplier relationships, reviews, and community trust.

Improving these four capitals moves the entire business toward exit readiness and helps owners command a higher valuation.

To understand how prepared your company is today, a structured readiness check helps you identify risks before buyers do.
This list of 15 exit-readiness checks is a good place to benchmark your current position.

How Intangible Assets Fit Into Exit Planning

Under IAS 38, an intangible asset must be:

• Identifiable (separable or arising from legal/contractual rights)
• Controlled by the business
• Expected to provide future economic benefits

Some intangible assets are amortized on a straight-line basis over their useful lives, while others with an indefinite useful life are not amortized at all, they are tested for impairment as part of standard financial reporting requirements under IAS 38.

Examples that qualify:

• Purchased software
• Acquired customer lists
• Patented technology
• Licensed intellectual property
• Trade names (if acquired)

Brands and internally built goodwill generally cannot be capitalized—even though they contribute heavily to economic value. That’s why intangible capital is often the bigger driver of valuation, even if it’s invisible on the balance sheet.

WIPO also notes that strong IP protection (patents, trademarks, copyrights) reinforces competitiveness and creates enforceable economic rights, strengthening buyer confidence.

Why Buyers Care: Turning Invisible Strengths into Enterprise Value

The stronger your intangible capital, the higher your enterprise value—because buyers can clearly see:

• Lower risk
• Higher durability
• Stronger cash flow
• Greater transferability
• Better growth potential

And most importantly:

They can see the business thriving without the owner.

That’s the foundation of a premium valuation.

How to Strengthen Each Capital (Owner Playbook)

Human Capital

• Build succession plans and leadership depth
• Cross-train critical roles
• Document responsibilities and authority
• Align incentives to business KPIs

Customer Capital

• Reduce reliance on any single customer
• Secure recurring or contract-based revenue
• Develop a structured retention strategy
• Build case studies and referenceable wins

Structural Capital

• Document SOPs for every core process
• Clean up your CRM, analytics, and data
• Protect IP and standardize workflows
• Modernize or consolidate your tech stack

This is where strong strategic planning pays off.

If you need a framework to align your goals with operational execution, this guide on the benefits of strategic planning explains how it drives enterprise value:

Social Capital

• Strengthen brand reputation through reviews
• Develop partnerships and referral channels
• Build trust signals for customers and buyers
• Show consistent community presence

How to Measure Intangible Capital (Before Buyers Do)

You can quantify intangible capital by tying it to:

• Adjusted EBITDA improvements
• Reduced customer churn
• Lower owner dependency
• Improved operational efficiency
• Better KPI performance

If you want to connect these improvements to valuation, this guide explains how:

Intangibles Are the New Value Drivers

Modern buyers aren’t just purchasing your financial performance, they’re buying:

• your systems,
• your people,
• your customer relationships,
• your brand,
• your culture,
• your processes,
• your ability to run without the owner.

These intangibles, assets and capital, shape the business’s durability, worth, and exit outcome.

If you’re preparing for a future transition or want to measure your value drivers today, Maus makes this process simple through assessments, dashboards, and advisor-led planning.