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.
Following are examples of Intangible
Assets





Goodwill
Patent
Knowhow
Trade Marks
Software, websites
Following Items are not Intangible
Asset, hence they should be written off
instantly.
I.
II.
III.
Preliminary Expenses
Advertisement suspense A/C
Other deferred Revenue Expenditure
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
(ii)Exchanged IA should be recorded at



Fair value of Asset surrendered
Fair value of asset obtained
Whichever is more clearly evident
(III) Self Generated IA are those assets
which are generated by entity at its own
a.
b.


Goodwill, Brand, Trade marks, copyrights , should
not be recorded as IA
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


Research phase means phase during which
knowledgeis gained, through planned methods.
Development means application of Knowledge.
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
(3.)Amortisation of I Asset.
I.
II.
III.
IA should be written off in the ratio of future
benefits from IA
If such benefits can’t be worked out, then SLM
should be used for amortisation
Life should be 10 years(3-5 years for website &
Software).Higher life can be taken, if justified