Trademarks and patent, Auditing

Trademarks and Patent

Trademarks and then written off over their useful lives and patents may be capitalized along with any renewal fees being charged to revenue. Whether a trade mark or patent is abandoned then the total book amount should be written off directly. Commonly the company should remain a register of all material items that should be determined against the accounting records, and the agreements of third party confirmation from the patent agent of the existence and company's title to the assets. Such auditors will require considering the valuation of the assets.  This will involve a review of the further income arising from the trade mark and patent to see where it specifies the value put on it.  In assessing the future income for further it will be essential to seems the possibility which income will not arise since for example to changes or  expiry in the client's business.

You must recall from your accounting knowledge also for such the goodwill impairment could be determined needing 'bottom-up' or 'top-down' tests.The 'bottom-up' test includes identifying the goodwill in the balance sheet such can be located on a reasonable basis to the cash generating unit. The 'top-down' test includes identifying the smallest cash generating unit such the goodwill concerned and then apportioning any unassigned goodwill on a reasonable basis to the cash producing unit.

In each case above, impairment has happened whether the recoverable amount of the cash producing unit is less than the carrying amount of the assets as like the assigned goodwill.

You must recall from your earlier studies also which the 'top-down' test is essential whereas there is no reasonable basis for carrying out a 'bottom up' test. Management's specification of the procedure of carrying out the impairment review must be carefully examined.  Such the auditor should see the reliability and sufficiency of the evidence obtainable.  Whenever investigative 'value-in-use' or 'economic value' evidence will be essential to support future cash flow projections, growth rates interest rates, future production costs, product life cycle etc.  These are topics areas where find out the 'total selling proceeds' is more simply verifiable through reference to evidence from present market activity.

It is especially essential that the auditor reviews the notice to the financial statements to sure about the disclosures in respect of the accounting policy and treatment is sufficient and suitable.

Posted Date: 1/25/2013 2:30:52 AM | Location : United States







Related Discussions:- Trademarks and patent, Assignment Help, Ask Question on Trademarks and patent, Get Answer, Expert's Help, Trademarks and patent Discussions

Write discussion on Trademarks and patent
Your posts are moderated
Related Questions
Develop an audit program to identify and reduce potential fraud using ACL.

i have assignment question

Techniques of obtaining evidence ISA 500 mentions them as: (a) Inspection of records or documents, (b) Inspection of tangible assets, (c) Observation, (d) Inquiry, (e) C

how to operate distribute amount and section rate also provision party bill


Existence - Detailed Audit of Stock In the previous the auditor accepted a director's certificate as to the existence of stocks.  Until some cases specifically in the United S

Seek Out Transactions with Related Parties  Within the course of the audit, the auditor carries out process that may identify the existence of transactions along with related

Long Term Contracts - Audit Process The authoritative document with reference to long term contracts is IAS 11: Construction Contracts and IAS 18: Revenue Recognition, and ISA

In planning the audit work of the Ministry, the audit staff member collected these details relating to the construction of an office complex. 1. In September 1994, the Ministry

The core principles of financial internal control are explained here: accounting and financial operations can be separated and the main purpose is the handling of cash and the copy