Intangible Assets

Intangible Assets

Intangible assets are those assets having no physical existence. The famous examples of such assets are logos, Trade Marks, Good will, Employees competence, Customer list.

Types of Intangible Assets

There are two main types of intangible assets. one intangible assets which can be expressed in financial terms. for example , goodwill, trade mark , logo and other assets which cannot be expressed in financial terms , for example, customer list, employee competence or trust. The standard deals only for those which can be expressed in financial terms.

Accounting Treatment of Intangible Assets

1. Initially Recognition 

Initially the intangible assets are recognized at cost. 

2. Subsequent Recognition of intangible Assets

subsequently measurement of intangible assets at cost or at fair value mode.

a. Cost Model

The asset has finite useful life will be depreciated over its useful life . In case asset has infinite useful life it will not be depreciated rather tested for impairment

b. Fair value Model

 In case of fair value model the active market conditions must be satisfied. Those condition includes the items are similar, buyers and seller are available and public can freely get the prices.