The Balance Sheet 189
profi ts by restricting the use of the assets to them-
selves. Two types of intangible nonproduced assets are
distinguished: contracts, leases, and licenses (61441)
and goodwill and marketing assets (61442), as shown
in Table 7.8. Whenever possible, contracts, leases, and
licenses, should be valued at current prices when they
are actually traded on markets. Otherwise, it may be
necessary to use estimates of the present value of ex-
pected future returns. Goodwill and marketing assets
are typically valued at their initial acquisition costs
minus allowances for amortization (see paragraph
10.55).
Contracts, leases, and licenses (61441)
7.105 Contracts, leases, and licenses (61441) are
treated as assets only when both the following condi-
tions are satisfi ed:
- Th e terms of the contract, lease, or license spec-
ify a price for the use of an asset or provision of
a service that diff ers from the price that would
prevail in the absence of the contract, lease, or
license. - One party to the contract must be able legally
and practically to realize this price diff erence.
7.106 Th ese kinds of contracts are regarded as as-
sets only if the existence of the legal agreement confers
benefi ts on the holder in excess of the price payable
to the lessor, owner of the natural resource, or permit
issuer,^24 and the holder can realize these benefi ts le-
gally and practically (i.e., if a market for the contract
exists). It is recommended that in practice, contracts,
leases, and licenses should be recorded only when the
value of the asset is signifi cant and if holders can actu-
ally exercise the right to realize the price diff erence
(^24) Also see 2008 SNA, Chapter 17, part 5.
by on-selling the asset. In this case, a suitable mar-
ket price necessarily exists. Th e asset does not exist
beyond the length of the contract agreement, and its
value must be reduced accordingly as the remaining
contract period shortens (see paragraph 10.53).
7.107 Contracts, leases, and licenses may be mar-
ketable operating leases (614411), permits to use natu-
ral resources (614412), permits to undertake specifi c
activities (614413), and entitlement to future goods and
services on an exclusive basis (614414).^25
Marketable operating leases (614411)
7.108 Marketable operating leases (614411) are
third-party property rights relating to fi xed assets. Th e
lease confers economic benefi ts to the holder in excess
of the fees payable and the holder can realize these
benefi ts legally and practically, through transferring
them. An example is where a tenant of a building has
a fi xed rental but the building could fetch a higher
rental in the absence of the lease. If, in these circum-
stances, the tenant is able both legally and practically
to sublet the building, then the tenant has an asset of
the type of a marketable operating lease.Permits to use natural resources (614412).
7.109 Permits to use natural resources (614412)
are third-party property rights relating to natural
resources. An example is where an institutional unit
holds a fi shing quota and is able, again both legally
and practically, to sell this to another unit. Payment
for a mobile phone license constitutes the sale of an
asset, not payment for rent, when the licensee ac-
quires eff ective economic ownership rights over the
use of the spectrum. To decide whether ownership is
eff ectively transferred, the six criteria quoted in Box
A4.1 are to be considered.Permits to undertake specifi c activities (614413)
7.110 A permit to undertake a specifi c activity
(614413) is an asset for the holder when: (i) the per-
mits are limited in number and so allow the holders
to earn monopoly profi ts, (ii) the monopoly profi ts do
not come from the use of an asset belonging to the
permit-issuer, and (iii) a permit holder is able both le-
gally and practically to sell the permit to a third party.(^25) For a description of the recording of these permits issued by
government see paragraphs A4.18–A4.52.
Table 7.8 Classifi cation of Intangible
Nonproduced Assets
6144 Intangible nonproduced assets
61441 Contracts, leases, and licenses
614411 Marketable operating leases
614412 Permits to use natural resources
614413 Permits to undertake specifi c activities
614414 Entitlement to future goods and
services on an exclusive basis
61442 Goodwill and marketing assets