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. Following are examples of
Intangible Assets
Goodwill
Patent
Knowhow
Trade Marks
Software, websites
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. 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. (ii)Exchanged IA should be
recorded at
Fair value of Asset surrendered
Fair value of asset obtained
Whichever is more clearly evident
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. Research phase means phase during which
knowledgeis gained, through planned methods.
Development means application of Knowledge.
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. (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
