An asset that has significant value but has no physical presence and provides a business long-term financial value is called as an "intangible asset." Identifiable intangible assets are those that the company can market separately, that can be separated from other assets, and that can be identified. Examples of distinguishable intangible assets include intellectual property, including patents, trademarks, and copyrights, as well as non-cash government grants, such as airport landing rights or broadcasting licenses. A trademark is a sign that can be used to separate the products or services of one company from those of other companies. Intellectual property rights offer protection for trademarks. Intangible assets are capitalized at fair value as of the date of acquisition rather than cost when acquired separately.
Adobe’s gross value of intangible assets surged from $1,140 million in FY2020 to $1,429 million in FY2021, an increase of 25.3%. In FY2021, the company's net value of intangible assets was $1,820 million. Trademarks and Purchased technology accounted for $376 million and $1,053 million respectively, based on the company's calculation of the fair value of identified intangible assets. The company's amortization expense for intangible assets was $354 million in FY2021.
Identifiable intangible assets acquired through Workfront and Frame.io contributed to the growth in other intangibles in fiscal 2021, which was largely offset by other intangibles related to their previous acquisitions. Intangible assets acquired through their acquisition of Workfront are mostly responsible for the increase in amortization expense during fiscal 2021 as compared to fiscal 2020. In FY2021, the overall valuation allowance was $335 million, mostly due to international intangible assets and a few specific state credits.
The company’s trademarks dropped from $384 million in FY2020 to $376 million in FY2021. The company completed the acquisition of Workfront in the first quarter of fiscal 2021 for about $1.52 billion in cash consideration, and they started integrating Workfront into their reportable segment for Digital Experience. Revenue from digital experiences increased from $3.13 billion in fiscal 2020 to $3.87 billion in fiscal 2021, a 24% year-over-year increase. The company’s revenue from Workfront's workflow platform offerings was one factor that contributed to increase subscription revenue for Digital Experience.
ADOBE Inc (Adobe) provides digital marketing, multimedia and creativity software products. Its products and services are used by creative professionals, knowledge workers, students, marketers, application developers, consumers, and enterprises to create, manage, deliver, measure, optimize, engage, and transact with compelling content and experiences spanning devices, personal computers, and media. It distributes products through distributors, systems integrators, independent software vendors, value-added resellers, software developers, retailers, and original equipment manufacturers (OEMs). Its business operations are spread across the Americas, Europe, the Middle East and Africa, and Asia-Pacific.
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