Consider the investments in the following assets : 1. Brand recognition 2. Inventory 3. Intellectual property 4. Mailing list of clients How many of the above are considered intangible investments?
- (a) Only one
- (b) Only two
- (c) Only three ✓ UPSC's answer
- (d) All four
Why the answer is (c)
• Intangible assets have no physical form but yield value: brand recognition, patents, copyrights, trademarks, software, goodwill and customer databases.
• Brand recognition (item 1), intellectual property (item 3) and a mailing list of clients (item 4) are all intangible investments.
• Inventory — raw materials and finished goods held for sale — is a physical, tangible current asset (item 2).
• In national accounts, spending on R&D and IP is now counted as investment, reflecting the growing weight of intangibles.
• Hence three of the four, option (c).
Why the other options are wrong
- (a) Only one
- Three items, not one, are intangible.
- (b) Only two
- Brand, IP and mailing lists are all intangible, making three.
- (d) All four
- Inventory is a tangible asset.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2023, held on 28 May 2023. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.