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IND AS – 38: Intangible Assets

IND AS – 38: INTANGIBLE ASSETS

IND AS – 38: INTANGIBLE ASSETS

MEANING

Intangible Asset are asset which are

  • Identifiable
  • Non- Monitory in nature
  • Without any physical substance
    For example Patent, Trade Mark, Goodwill, copyright, Customer details etc. Intangible asset can be categorized into two parts as Intellectual property and Goodwill.

Intellectual property is something that which you create with the help of your mind such as design, plan, outline etc. and other companies cannot copy your intellectual property because it includes Trademark, patent and licensing agreement.

Goodwill is an asset which is created when a business obtain a strong position in its market. It measures various factors which affects our brand value example company’s reputation, strategies, employee relation and customer base.

Following are the list of Intangible Assets which are out of scope of Indian AS 38:-

  1. Deferred Tax Asset
  2. Investment as Plan Asset
  3. Intangible Asset created under Business Combination
  4. Mining & Extraction rights

RECOGNITION PRINCIPLE

Intangible Assets are recognized as asset if they qualify following conditions:

  1. It is probable that Future Economic Benefit from asset will be flow to entity
    AND
  2. Cost of Intangible Asset can be reliably measured

SUBSEQUENT RECOGNITION

If any further expenditure is incurred on Intangible asset then it will also be capitalized only if it meets Recognition Principle discussed as above.

CALCULATION OF INTANGIBLE ASSET COST WHEN PURCAHSED

In Rs.

Purchase Price   

XXX

Less: Trade Discount/ Rebate     

XXX

Net Purchase Price                   

XXX

Add: Taxes on Purchase non-refundable                                

XXX

Add: Professional Fees for Acquisition                                    

XXX

Add: Valuation Cost                                                                       

XXX

  Total Cost                        

XXX

 

CAPITALISATION

ASSET

CAPITALISATION COST

USEFUL LIVES

Computer Software

More than Rs.100 Lacs

10 years

Computer Software

Rs.10 Lac to Rs. 100 Lacs

5 years

Websites

Rs. 100000

3 years

License & Permits

Rs. 100000

Used shorter estimated useful life. If life is indefinite then we do not amortize

Patents

Rs. 100000

Used shorter estimated useful life. If life is indefinite then we do not amortize

Copyrights & Trademark

Rs. 100000

Used shorter estimated useful life. If life is indefinite then we do not amortize

Natural Resources & Extraction

Rs. 100000

Used shorter estimated useful life. If life is indefinite then we do not amortize

Other Intangible Assets

Rs. 100000

Used shorter estimated useful life. If life is indefinite then we do not amortize

The NeuSource Startup Mind is the finest business startup consultant that offer various services of registration like Company Registration, Proprietorship Firm Registration, Partnership Firm Registration, LLP Registration, Pvt Ltd Company registration, GST Registration, Copyright Registration, ISO Registration, Trademark registration, NIDHI Company registration, Digital Signature Certificate Verification

27 Mar

Neha Sahni
Neha Sahni

All pieces that originate from the Team are important to present the organization and to reach at new statures. Neusource is one of an Endeavor in current field.