Intangible assets usually refer to identifiable non-monetary assets without physical form owned or controlled by an enterprise. The disposal methods of intangible assets include sale, leasing, donation, and scrapping. When an enterprise disposes of intangible assets, how should the relevant accounting entries be made?
Accounting entries for disposal of intangible assets
1. Sale of intangible assets (transfer of ownership)
Debit: bank deposits
Intangible Asset impairment provision
Accumulated amortization
Profits and losses from asset disposal (debit)
Credit: intangible assets
Taxes payable ——VAT payable (output tax) (if involved)
Profits and losses from asset disposal (loan difference)
2. Leasing of intangible assets (transfer of use rights)
>(1) The income obtained from the transfer of use rights should be recognized in accordance with the relevant income recognition principles
Debit: bank deposits
Credit: other business income
Taxes payable - value-added tax payable (output tax) (if involved)
(2) Include the relevant expenses incurred in connection with the transfer of the right of use into other business costs
Debit: other business costs
Credit: accumulated amortization
Bank deposits
3. Scraping of intangible assets
If the intangible assets are not expected to bring economic benefits to the enterprise, they should be scrapped and written off, and their book value should be transferred to current profits and losses. According to the difference, the "non-operating expenses" account is debited.
Debit: Accumulated amortization
Provision for impairment of intangible assets
Non-operating expenses - loss on disposal of non-current assets
Debit: Intangible Assets
What are intangible assets?
Intangible assets refer to identifiable non-monetary assets without physical form owned or controlled by an enterprise. They are divided into broad and narrow senses: Intangible assets in a broad sense include monetary funds, financial assets, long-term equity investments, and patents. Rights, trademark rights, etc.; intangible assets in a narrow sense include patent rights, trademark rights, etc.
What is accumulated amortization?
Accumulated amortization is used to amortize intangible assets. The balance is generally on the credit side, and the credit side registers the accumulated amortization that has been provided. Similar to the accumulated depreciation account in fixed assets.
What are non-operating expenses?
Non-operating expenses refer to various non-operating expenses except main business costs and other business expenses.