Intangible assets are those assets which have lack of physical existence and are not considered as

financial instruments but it has the ability to add more value and generate future revenue for a

company. As far as modern business is concern, intangible assets become an important issue

regarding its valuation. Here we tried to find out the recording process of intangible assets that

recorded by Dutch Bangla Bank Limited of Bangladesh and Bank of America in their balance

sheet which are given below.

After analyzing the financial statement section of annual report of Dutch Bangla Bank Limited

(2013) we come up with that they only record software as their intangible asset which is

basically purchased intangible. Dutch Bangla Bank Limited included different intangible assets

except software in Other assets part. There is a valid reason to include different intangible

assets in other assets as in an article of Stephen H. Penman and George O. May Professor of

Columbia Business School refers that most intangible assets are not shown alone because

maximum intangibles may not work independently. They need to take help of tangible assets to

create value for a company. This article also refers that if a particular intangible asset has no

growth rate, a company basically avoids to record it in balance sheet. So this might be the reason

why Dutch Bangla Bank Limited does record intangible in Other assets section instead of

Intangible assets part.

However Dutch Bangla Bank do not show their internally created goodwill in their balance

sheet. There is a valid reason to do so, as a research paper of Liselotth Arkblad and Carolina

Milberg of Goteborg University refers that according to the organizational structure and for

keeping few secrets and to have the competitive advantages company do not show their

intangible assets in balance sheet. But Dutch Bangla Bank Limited carries a handsome amount of

goodwill, as the per share value of Dutch Bangla Bank Limited is higher compare to all other
banks listed in Dhaka Stock Exchange. This is noticeable evidence that the bank has internally

created intangible assets (Goodwill) which is adding more value for their bank.

On the other hand, Bank of America which is a well-known bank around the world follows some

rules in terms of recording their intangible assets. After analyzing the financial statements of

bank of America from 2010 to 2013, we find that this bank shows goodwill in their balance sheet

because they could able to approximate their fair value of goodwill. So they put an approximate

value of goodwill, where maximum bank of Bangladesh do not record it because they are not

able to do the perfect valuation of goodwill. Another important thing is that Bank of America

records their various assets in a single term called other intangible assets in their balance sheet.

Bank of America do not record every particular intangibles in their balance sheet as we mention

before from the article of Stephen H. Penman that more intangible might not add value

independently, they need to take help of other tangible assets. Likewise, the Dutch Bangla Bank

Limited, Bank of America has purchased intangible asset which is software.

In a nutshell, we can say that different company has their different policy to show their intangible

assets. It basically depends on company structure, kinds of intangibles they have and the working

capabilities of intangible assets.