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.
Lawful action, such as an agreement consciously agreed to by two or more entities, establishing lawful accountability. For example, an apartment lease legally binds the lessor and the lessee. An illegal action, such as forcing, tricking, or coercing a person into an agreement, is not legally binding.The document's signing gives the number of conditions the weight of law.Both parties knowingly understand what they are agreeing to is the other requirement to legally establish an agreement or contract.n illegal action, such as forcing, tricking, or coercing a person into an agreement, is not legally binding. The document's signing gives the number of conditions the weight of law. Both parties knowingly understand what they are agreeing to is the other requirement to legally establish an agreement or contract.