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.
What is the difference between a letter of intent and a memorandum of understanding? A letter of intent is likely to encompass a number of different aspects, and it varies in length according to the level of specificity and the type of transaction. All letters of intent lay out the basics of a deal, including cost, time frame and contingencies.