Provision for impairment of intangible assets cannot be reversed.
If the book value of an intangible asset is greater than the recoverable amount, provision for impairment of the intangible asset shall be made based on the difference. Once the provision for impairment of intangible assets is made, it cannot be reversed in subsequent periods. In accounting, intangible assets are usually understood in a narrow sense, that is, patent rights, trademark rights, etc. are called intangible assets.
Intangible assets refer to identifiable non-monetary assets without physical form owned or controlled by an enterprise. Monetary funds, receivables, held-to-maturity investments, etc. are all monetary assets and not intangible assets. The existence of goodwill cannot be separated from the enterprise itself, is not identifiable, and is not an intangible asset.
When there are signs that an intangible asset may be impaired on the balance sheet date, and its recoverable amount is lower than its book value, the enterprise shall write down the book value of the intangible asset to its recoverable amount, minus The amount recorded is recognized as impairment loss and included in the current profit and loss, and corresponding impairment provisions are made.
Accrual entries for intangible asset impairment provisions:
Accrual entries for intangible asset impairment provisions:
At the end of the period, the intangible assets held by the enterprise If the book value is higher than its recoverable amount, the difference shall be calculated.
Debit: Asset impairment loss - Provision for impairment of intangible assets
Credit: Provision for impairment of intangible assets
Once the impairment loss of intangible assets has Provision is made and cannot be reversed during the holding period.
Determination of the impairment amount of intangible assets:
When there are signs that an intangible asset may be impaired on the balance sheet date, and its recoverable amount is lower than its book value, the enterprise shall The book value of the intangible asset is reduced to the recoverable amount, and the reduced amount is recognized as impairment loss and included in the current profit and loss, and corresponding impairment provisions are made.