1. Amortization of intangible assets is a method of amortizing the original price of intangible assets within their validity period. The amortization of intangible assets generally adopts the straight-line method. When amortizing, it is directly included in the debit of the "intangible assets" account, and there is no need to set up another amortization account. The balance of the original price of the intangible asset minus the intangible asset is the accumulated amortization amount of the intangible asset. In order to provide relevant data on the amortization of the company's intangible assets, the company must indicate the original price of each intangible asset when replacing old accounts.
2. Intangible assets with exact useful lives, such as patents, proprietary technologies, etc., are amortized using the sum-of-the-years digits method in the accelerated amortization method. For non-patented technologies that do not have an exact life, amortization is not required. In order to compensate for the value of this type of intangible assets, an "intangible asset information system" can be established to standardize the management of intangible assets and measure the value of intangible assets.
Intangible assets with unlimited life, such as purchased goodwill, should not be amortized. Outsourced goodwill can play a role in many aspects, and it is difficult to distinguish the weight of its role in various aspects. For this type of intangible assets, regular evaluation methods should be used and the book value should be adjusted regularly.
Extended information
Intangible assets (IntangibleAssets) refer to identifiable non-monetary assets that have no physical form and are owned or controlled by an enterprise. Intangible assets can be divided into broad and narrow senses. Intangible assets in a broad sense include monetary funds, accounts receivable, financial assets, long-term equity investments, patent rights, trademark rights, etc., because they do not have physical entities, but are expressed as certain legal rights. or technology. However, in accounting, intangible assets are usually understood in a narrow sense, that is, patent rights, trademark rights, etc. are called intangible assets.
The current corporate accounting system stipulates the amortization of intangible assets as follows: Intangible assets should be amortized evenly over the estimated useful life starting from the month of acquisition and included in profits and losses. If the estimated useful life exceeds the beneficial life stipulated in the relevant contract or the effective life stipulated by law, the intangible asset shall be used according to the beneficial life stipulated in the contract (not stipulated by law) or the useful life stipulated by law (not stipulated in the contract) or the contract and legal provisions (both). The shorter of the beneficial years shall be used as the amortization period for amortization, or if neither the contract nor the law stipulates, the amortization period shall not be less than 10 years.
According to their useful life, intangible assets are divided into two categories: term intangible assets and indefinite term intangible assets. The so-called term intangible assets means that as the intangible assets are used, their service life will become shorter and shorter. Eventually, after a certain service life, it will no longer be an asset of the enterprise. This period of use is in accordance with the current accounting system.
Reference materials Baidu Encyclopedia of Intangible Assets