Discuss the importance of the intangible assets to the company’s business.

Harman Beauty Products Ltd. produces organic aromatherapy hand soaps and bath oils to retail health stores across North America. The company purchased the trademark and patented recipes for this unique line of soaps and oils, called Aromatica Organica, five years ago for $150,000. Each type of soap or oil is made from a secret recipe only known to the head “chef” at Harman who distributes the ingredients for each type of soap or oil to small groups of “cooks” who then combine the unknown ingredients into a small batch of a particular type of soap or oil. These are then packaged and shipped to fill each order placed by the retail stores through the colourful and user-friendly website developed by Harman.

Required:

a. Identify any intangible assets that may appear on the company’s SFP/BS.

b. Discuss the importance of the intangible assets to the company’s business.

c. Why it is important to record intangible assets on a company’s SFP/BS?

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