What Does tangible Mean
Originating from the Latin term tangibilis , the word tangible is used to name what can be touched or tested in some way. In a broader sense, it also refers to what can be accurately perceived .
For example: “I don't like token gifts : I prefer tangible things” , “I need to achieve some tangible achievement to avoid being fired” , “Our management has achieved tangible results in all areas” .
The tangible, in short, is what can be accessed from touch . This is the sense that enables an organism to perceive various characteristics of an object, such as its hardness or its temperature. The most important organ in this sense is the skin , which has multiple nerve receptors that manage to convert external stimuli into data that can be interpreted through brain activity.
It could be said that all concrete (physical) things are tangible: a ball (ball), a bed, a computer , a tree, and so on. All of them are made of materials and can be perceived by touch. When a subject passes his hand over the petal of a flower, the nerve receptors in his skin pick up the information on its texture and transmit it to the brain.
Abstract concepts like emotions and feelings , on the other hand, are intangible . Happiness, sadness and love cannot be touched: these words, however, can be manifested in a tangible way (a special gift to a loved one can be a tangible manifestation of affection). Other intangible things are wind, light, and smoke.
It should be noted that for the economy , a tangible good is that product or service that is marketed among the inhabitants of the same nation.
The tangible in accounting
During the Industrial Revolution, accounting provided an essential service to the creation of capitalism, allowing to account for both the raw materials that were available, as well as the products obtained in the industrialization process and all those goods related to production. However, later new elements appeared in the system, such as abundant information, globalization and the close relationship that can be achieved thanks to the existence of the network.
Since that time, services have been prominent in the economy ; This had negative consequences, because services are not easy to account for , given their intangible nature. In turn, the enormous speed with which information travels on the network has raised hundreds of questions in accounting, such as how to control and account for what does not have a specific form and fluctuates in almost unpredictable ways throughout weather.
The solution to this conflict can be either to live the old-fashioned way (establishing static parameters that do not clearly reveal the truth, but that allow numbers to be carried over it) or try to find a way to account for what is intangible.
While the orthodox accountants are inclined to continue with the old practices, although they must dispense with the exact values of reality, the modern ones prefer to look for new ways of working on the goods in order to be able to find an exact number that describes the value of the services. and everything related to them.
Finally, it is worth mentioning the concept of tangible book value , which should not be confused with the quotation ratio, also known simply as book value . Both allow to determine if the stock market share of a certain company is expensive or cheap, and they differ in the way in which they are obtained. The first only takes into account the real assets of the company, without considering debts and other aspects; the second is obtained by dividing the equity by the number of shares. The former refer to the value of the company's assets after debts have been discounted ; the lower it is, the cheaper the stock.