Amortization method of intangible assets
The enterprise shall amortize the intangible assets in the month of purchase.
Amortization of intangible assets generally adopts the straight-line method and is directly included in the accumulated amortization credit.
The amortization amount of intangible assets used by enterprises is included in the management expenses;
Amortization of leased intangible assets is included in other business costs;
The economic benefits contained in intangible assets are realized through products or other assets produced, and the amortization amount shall be included in the cost of related assets.
Amortization period of intangible assets
According to Article 67 of the Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC) (the State Council Order No.512 of the People's Republic of China), the amortization expenses of intangible assets calculated by the straight-line method are allowed to be deducted. The amortization period of intangible assets shall not be less than 10 year. As the investor or transferee of intangible assets, if the relevant laws or contracts stipulate the service life, it can be amortized in installments according to the stipulated or agreed service life. Therefore, if the relevant laws or contracts stipulate the service life of the transferred intangible assets, they can be amortized in installments according to the stipulated or agreed service life. For example, if the contract stipulates that the service life of the patent right is 3 years, it should be amortized according to 3 years and deducted before tax.
How to confirm intangible assets?
The intangible assets of a company can only be recognized when the following conditions are met: the economic benefits related to the intangible assets are likely to flow into the enterprise; The cost of this intangible asset can be measured reliably.
Self-created goodwill of enterprises and internally generated brands, registrations, etc. Not recognized as intangible assets, because its cost cannot be measured reliably.
Intangible assets refer to identifiable non-monetary assets owned or controlled by enterprises without physical form. It mainly includes patent right, non-patented technology, trademark right, copyright, franchise right, etc.
Meet one of the following conditions, is considered to be identifiable:
Capable of being separated or divided from an enterprise. And can be used for sale, transfer, license, lease or exchange alone or together with related contracts, assets or liabilities.
Derived from contractual rights or other legal rights, regardless of whether these rights can be transferred or separated from the enterprise or other rights and obligations.
The existence of goodwill is inseparable from the enterprise itself, which is unrecognizable and does not belong to intangible assets.