Intangible assets have been argued to be one possible contributor to the disparity between company value as per their accounting records, and company value as per their market capitalization. 1  Considering this argument, it is important to understand what an intangible asset truly is in the eyes of an accountant.
The challenge is that a letter of intent can be, at the same time, both binding and nonbinding. And when drafted to resemble an official contract, even letters of intent that specifically say they are not binding might be held by a court to be binding in whole or in part for a variety of reasons.
Some simple transactions may not need a letter of intent. The parties can simply proceed with the. creation of their final agreement. In other cases, however, a letter of intent can determine major issues. and make clear to the parties why the transaction is a good (or bad) idea. It can allow parties to start.