When purchasing a patent: Debit: Intangible assets - 30 items of XX patents Credit: Bank deposits, year-end amortization: . Debit: Management expenses Credit: Accumulated amortization, amortization refers to other things that can The accounting treatment method of allocating the acquisition cost of long-term operating assets according to their useful life is similar to the depreciation of fixed assets. Amortization expenses are included in administrative expenses to reduce current profits, but have no impact on operating cash flow. Generally amortized assets, such as large-scale software, intangible assets such as land use rights and start-up expenses, can contribute to the company's business and income in the long term, so their acquisition costs should also be amortized annually. The amortization period generally does not exceed 10 years.
1. Like depreciation, the amortization of intangible assets can also choose the straight-line method and the accelerated method. In terms of amount, general amortization expenses are much smaller than depreciation expenses. That is to say, most companies' fixed assets are much larger than intangible assets. Therefore, amortization and depreciation are usually disclosed together without distinction. According to the provisions of Article 49 of the detailed rules of the tax law, enterprise preparation expenses shall be amortized in installments starting from the month following the month in which production and operations are started, and the amortization period shall not be less than five years. Land use rights should be accounted for and amortized separately as intangible assets. The amortization period of intangible assets, if the amortization period is stipulated in the contract, shall be amortized according to the period stipulated in the contract; if there is no contract, it shall be no less than 10 years. Changes in Standards Changes in Amortization Methods in the Old and New Accounting Standards In February 2006, the Ministry of Finance officially issued accounting standards, in which the intangible assets standard is more clearly defined, the scope of intangible assets and the accounting treatment of research and development expenses are intangible asset standards. Realized on January 1, 2001.
2. The new intangible asset standards are more reasonable in the selection of amortization methods for intangible assets. Intangible assets are no longer uniformly amortized based on their average useful life, but instead consider the company's expected consumption pattern of future economic benefits generated by the intangible assets. Compared with the old intangible assets standards, the new intangible assets standards undoubtedly pay more attention to the way intangible assets generate economic benefits, which makes the provision of accounting information more consistent with the requirements of accounting information quality and makes accounting information more objective and true. Article 15 of the old intangible asset standard stipulated that the cost of an intangible asset should be amortized evenly over its expected useful life starting from the month of acquisition. That is, the amortization of intangible assets uses the straight-line method. Compared with fixed assets, intangible assets have many similarities.
3. Both are long-term assets, and economic benefits can be released in various forms. The "Fixed Assets Standards" stipulate that enterprises should reasonably select the depreciation method of fixed assets based on the expected realization of the economic benefits contained in the fixed assets. Alternative methods include the straight-line method, the workload method, the double-declining-balance method, and the sum-of-the-years method. With the advent of the knowledge economy, intangible assets are playing an increasingly important role in corporate economic activities. Theoretically, the amortization method of intangible assets should also be compared with the depreciation method of fixed assets, that is, it should also reflect the way the enterprise consumes the economic benefits contained in the intangible assets.