Intangible assets - it's such assets that do not have a material form, such as production equipment or finished products, but they, at the same time, help to increase the incomes of the company in any way.Among such assets include a variety of objects.This may be a license or patent, and can be a computer program, or even a company logo.
distinctive feature of intangible assets is the fact that they serve the company over a long period of time, more than a year if the accounting terminology to express himself.In this they resemble the basis of money and, as the main means they lose their value over several reporting periods.So, to reflect this phenomenon, we need to take the help of depreciation.
Amortization of intangible assets is somewhat different from the more common depreciation of industrial equipment.The thing is that in this case we do not know exactly for how long the asset will bring the company's favor.Of course, in some cases it reflects a legal right way.For example, a patent may be granted for a certain period of time.If such a period is not specified, in the world practice it accepted that intangible assets are for 20 years and, therefore, amortization of intangible assets should be carried out during this period.However, for tax purposes the term is generally reduced to 10 years.
is worth noting that in some cases, amortization of intangible assets and does not apply.Such cases include the company's reputation.Of course, not the company's reputation in the usual sense of the word, because to define it in terms of money is impossible, and the difference between the purchase cost of the company and its assets, which according to accounting rules should be maintained on the balance sheet.
However, this case is private, and in most cases, depreciation still have to count.So, you must know the methods of amortization of intangible assets, which are most common in the world practice.The most simple method - it is linear.In this case, all you have to do - is to divide the total cost of an intangible asset that is reflected on the balance sheet, by the previously calculated useful life.In the future, it is necessary to record the resulting annual amount of costs of the company.
With regard to non-linear method, in this case the cost of writing off intangible assets on the balance sheet in costs is uneven amounts.There are different ways of calculating depreciation of intangible assets nonlinear method, but their general principle is that the more time has passed since the acquisition of the intangible asset, the less must be depreciation.
method knead residue, for example, involves every year to deduct a certain percentage of the residual value of the assets.Commonly used linear calculated by percentage, multiplied by two.In the last year the asset is deducted for the rest.In addition, sometimes the method of depreciation is used, depending on the volume of output.The greater the volume of the issue, the more should be written off depreciation.
As you can see, the amortization of intangible assets - the process is quite complicated, and therefore it should be carried out exclusively by a professional accountant who is well versed in the essence of the problem.As for the head of the company, they in this case is more important than the end result, not the method of calculation.
