Accounting for Intangible Assets

Accounting Assignment Help >> Accounting for Intangible Assets

Accounting for Intangible Assets

We define intangible assets as those identifiable and non-monetary assets which we cannot see, touch or physically measure. These are created through time and/or by effort and can be identified as separate assets.

Intangibles can be classified as:

1. Legal intangibles- these comprise of patents, copyrights, trademarks, patens and other trade secrets. The generic term intellectual property is used to describe these intangible assets and is used to generate legal property rights which are defensible in the court of law.

2. Competitive intangibles- these include the knowledge activities, leverage activities, collaboration activities and structural activities. They are non-own able legally and effect the productivity, efficiency, opportunity cost and wastage in an enterprise. They form the source of competitive advantage, which is mostly human capital.

Financial accounting or intangibles

Guidance is provided on how to account for intangible assets in financial statements by the international accounting standards board or the IASB. It recognizes the legal intangibles which are purchased from the third parties and does not recognize those which are developed internally (IAS38). The US GAAP classifies intangible assets into:

1. Purchase versus internally created intangibles, and

2. Limited life versus indefinite life intangibles

Recognition of expense

The expense of the intangible asset is based on their receptive life expectancy. The useful life can either be identifiable or indefinite. The indefinite useful life intangibles are reassessed each consecutive year for impairments and must be recognized if impairment has occurred. The intangible assets which have identifiable useful lives are amortized on the given straight line basis over the legal or economic life of the asset (whichever is shorter). Goodwill cannot be amortized and has to be tested for impairment and if it is found impaired, the income statement shows loss.

Taxation of intangible assets

The costs of intangible assets are to be capitalized and not treated as deductible expenses, for income tax purposes. The capitalization of costs is necessary for creating, acquiring or enhancing intangible assets, as per the treasury regulations. For example, the amount paid for obtaining a trademark must be capitalized, according to the regulations. Some amounts which are used for facilitating these transactions are also capitalized. Categorization of intangible assets is also made on the basis of whether they are crated by a taxpayer or acquired by another party. The cases and timings, where the capitalizations will be required, have also been stated clearly by the regulations.

Amortisatization

1. The amortization must occur over the estimated best useful life-period of the asset.

2. The rebuttable presumption is that the usefulness cannot exceed a time span of ten years.

3. There has to be persuasive evidence that justifies the life of more than ten years.

4. The amortization involving a time period of more than ten years requires the disclosure for the reasons for rebuttable presumption and the factors used for determining the useful life along with the annual impairment review.

If the asset is controlled by legal rights the useful life can only exceed the period of legal right if the legal rights are renewable in nature and the renewal is virtually certain. The methods for amortization include unit production method, reducing balance method and straight line method.

Live Accounting Experts: Accounting for Intangible Assets Assignment Help

Do you need to complete assignments on the topic of accounting for intangible assets within strict deadline? Come with Expertsmind.com now for fulfilling your entire academic or university needs including assignments, homework and questionnaires. Expertsmind in aide by around 4,600 highly qualified and amply experienced tutors form all around the world and are there to solve all your academic queries 24*7. Knowledge of intangible assets is very important for undertaking various standard accounting exams and also for being appointed as managers and accountants. Intellectual property rights, amortization etc. form some of the key issues which all firms face regularly. We can also provide online tutoring classes on various academic subjects including that of accounting of intangible assets. By the use of some state of the art online tools, we aim at creating the atmosphere of a live classroom in your home. This will enable you to have a thorough academic experience within the comforts of your home. We also revise your assignments until they match your specifically perfect needs. The services can be availed at very reasonable prices so that your do not have to overstretch your educational budget. Join us now for gaining in-depth knowledge if accounting of intangible assets.

Lists of Important Accounting Topics To Get Help with


Accounting Basics Questions & Answers

What is the impact on the companys overall roi?

A company has a Return of Investment (ROI) of 20%, and it invests an additional $100,000 in a project. What is the impact on the company's overall ROI?

Compute the stockholders equity after business combination?

On the same day, Patis paid P10,000 for other direct costs of combinition. Compute the stockholders' equity after the business combination.

How differing accounting standards impact cost reimbursement?

In the article you will notice how differing accounting standards (GAAP vs. FAR) can impact cost reimbursement (Mcclure-Nelson, 2022).

Determine the federal tax payable for the trust?

Determine the net income for tax purposes / taxable income for the Trust for 2024. Determine the federal tax payable for the Trust for 2024.

What is the acb of the preferred shares?

Under ITA Section 85, Roger Dial transferred a piece of land he held personally. What is the ACB of the preferred shares and the ACB of the common shares?

On what date will dill pickle have to begin collecting gst?

Pickle is a manufacturer that began its operations on January 1 of the current year. On what date will Dill Pickle have to begin collecting GST?

What is amount of taxable income is eligible?

The company is not associated with any other CCPC. What is amount of taxable income in 2024 that is eligible for the small business deduction?

What is taxable capital gain that will arise from redemption?

Belly has 220,000 common shares currently outstanding. What is the taxable capital gain that will arise from this redemption?

Calculate the division 36- losses available to carry forward?

A taxpayer has gross rent of $35,000, rental deductions of $31,000, and deductible personal. Calculate the Division 36; losses available to carry forward.

What are the equivalent units for the process?

The units in the ending work-in-process inventory are 50% complete. What are the equivalent units for the process?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd