How is an intangible asset accounted for?

How is an intangible asset accounted for?
View Full Size

How is an intangible asset accounted for?


The accounting for an intangible asset is to record the asset as a long-term asset and amortize the asset over its useful life, along with regular impairment reviews. The accounting is essentially the same as for other types of fixed assets.

What is Intangible assets?

It is an asset which is identifiable, non-monetary without physical substance.

  •  Identifiable - can be separated when acquired

  •  Non-monetary - cannot convertible to cash easily

  •  Without physical substance - unable to touch

Example of intangible assets

  •  Patent

  •  Copyright

  •  Trademark

  •  Brand

  •  Software

  •  Franchise agreements

Recognition and measurement of Intangible Assets

1. Separate acquisition

Measured at cost at the acquisition date

Costs included:-

  •  Purchase price

  •  Import duties, non-refundable taxes, discount or rebate

  •  Any directly attributable cost of preparing the asset for its intended use

2. Acquired as part of a business combination

 Measured at fair value at the acquisition date

Measurement after Recognition

Cost model

Cost

Less: accumulated amortisation

Less: accumulated impairment losses

Amortisation Period

  •  Systematic basis over its useful life

  •  Amortisation begins when the intangible asset is available for use

  •  The amortisation charge shall be recognised as an expense

Amortisation Method

  • Straight-line method or

  • Amortisation method that reflects the pattern in which it expects to consume the asset’s future economic benefits

Visit Us

  • Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

  • Wisma THK, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Account, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients

KTP Lifestyle

An internal community for our colleagues on work and leisure.

KTP Career

An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.

#Ktp #Thks

 

 


 

THK Management Advisory Sdn Bhd

Wisma THK, No. 41, 41-01, 41-02, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru, Johor, Malaysia.
+6012-771 7903
+607-361 3443
 
Switch to Mobile Version
Subscribe Newsletter