As26

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As26

  1. 1. AS-26 INTANGIBLE ASSETS (1)Meaning: Intangilbe assets means assets, without physical substance, which are under control of entity held for use,production of goods, rendering of services and having future economic benefits.
  2. 2. Following are examples of Intangible Assets  Goodwill  Patent  Knowhow  Trade Marks  Software, websites
  3. 3. Following Items are not Intangible Asset, hence they should be written off instantly. I. Preliminary Expenses II. Advertisement suspense A/C III. Other deferred Revenue Expenditure
  4. 4. 2.Recognition of Intangible Assets (i)Purchased IA should be recorded at: Cost price paid xxx Add: Taxes paid xxx Add:Expenses to obtain Title xxx XXX
  5. 5. (ii)Exchanged IA should be recorded at  Fair value of Asset surrendered  Fair value of asset obtained  Whichever is more clearly evident
  6. 6. (III) Self Generated IA are those assets which are generated by entity at its own a. Goodwill, Brand, Trade marks, copyrights , should not be recorded as IA b. Remaining IA (i.e,Software, website, Trademark (Lal Kila ), Knowhow (shelling process) are recorded as follows:  Expenditure during research phase will be transferred to P&L AC  Expenditure during Development phase will be capitalised with value of Asset
  7. 7.  Research phase means phase during which knowledgeis gained, through planned methods.  Development means application of Knowledge.
  8. 8. If all of following condition are satisfied, then it is considered development phase  Technical feasibility has been established  Management has appointed its development  Market exists for Intangible Asset  Resources exists for intangible Asset
  9. 9. (3.)Amortisation of I Asset. I. IA should be written off in the ratio of future benefits from IA II. If such benefits can’t be worked out, then SLM should be used for amortisation III. Life should be 10 years(3-5 years for website & Software).Higher life can be taken, if justified

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