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
For each of the following situations, describe how risk of material misstatement should be assessed and what effect the assessment will have on detection risk. (i) Johnson is a

Pending Litigation - Audit Process Since of the inherent uncertainty, in calculating the outcome of legal actions so this is an especially difficult area for the auditor. Seve

Accounting Requirements - IAS 40 Investment Properties IAS 40 prescribes the accounting treatment about investment property and related disclosure necessities.  Investment

what is statutory audit and private audit

Meaning of the auditing definition a) Orderly and efficient manner: An organization which is run in an orderly and proficient manner is able to satisfy the requirements o


Permanent Audit File The permanent audit file might include, inter alia: a) A copy of the enterprise's statutes and other legal or statutory documents governing the enterpri

Specialized Audit Situations Companies carry on thousands of different types of trade, business or professional activities.  It is not possible in a manual on general auditing

Mr. Howe, a Junior Partner of the CPA firm Dewey, Cheatem, & Howe (DCH), after noting that there is a proposal to limit Auditor liability is very excited and has announced that th

The Department of Higher Education (DoHE) in the Ministry of Education awarded a contract for support of 60 computers to My IT Co. Ltd. and the contract conditions required the del