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HAYEK92

42 - Straight

Colorado, United States

Jul 18, 2014 03:38

I'm pretty rad...Contracts. Certain contracts, such as employment, affiliation, advertising, or sales contracts, can be treated as intangible assets because they add value to a company. For example, a long-term lease at below-market rates can represent a huge overhead savings. Or, when a business is sold, the president of the selling company may contract to remain for a certain period. This contract is valuable because it saves the cost to replace the president with a new executive who would have to learn the business and take time to become as effective. Other types of valuable contracts might be subscription contracts (for example, a cable company's revenue is based largely on subscriptions) or long-term service contracts sold by the company.

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