What are the accounting entries of patent right transfer?

The transfer of patent right is divided into the transfer of right to use and the transfer of ownership, and the accounting treatment of the two transfer methods is different. So how should the accounting entries of patent transfer be made?

Treatment of patent transfer items

I. Accounting Treatment of Transfer of Right to Use

The transfer of the right to use the patent belongs to the lease of intangible assets, and the specific accounting treatment is divided into the following steps:

(1) When obtaining the rental income from patent right transfer:

Debit: bank deposit

Loans: other business income

(2) When the patent transfer should be carried forward with VAT:

Borrow: taxes and surcharges

Loan: Taxes payable-VAT payable

(3) When amortizing the cost of transferring the patent right:

Debit: other business costs

production cost

Loan: accumulated amortization

Second, the accounting treatment of patent right transfer

(1) When purchasing the patent right:

Borrow: intangible assets-patent right

Loans: bank deposits

(2) Annual amortization:

Debit: management expenses-amortization of intangible assets

Loan: cumulative amortization-patent right

(3) When obtaining the transfer income:

Debit: bank deposit

accumulated amortization

Profit and loss from asset disposal

Loan: intangible assets-patent right

How to understand the amortization of intangible assets?

When an enterprise obtains intangible assets, it shall analyze and judge its service life. Intangible assets with limited service life shall be amortized. Intangible assets with uncertain service life should not be amortized. The residual value of intangible assets with limited service life should be zero. Intangible assets with limited service life shall be amortized from the month when they reach the usable state (and reach the scheduled usable state), and shall not be amortized in the month of disposal.

Under the new accounting standards, when the cost of intangible assets is amortized monthly:

Debit: management expenses-amortization of intangible assets

Loan: accumulated amortization

Amortization method of intangible assets: ① straight-line method (the amortization amount of intangible assets is evenly distributed to each accounting period) ② yield method (the amortization amount is calculated based on the output provided by intangible assets during the whole use period).