Intangible assets: what they include (examples)

We explained what intangible assets are in ours. We will explain in this material what relates to intangible assets in accounting and give examples of such assets.

Intangible assets include

In general, intangible assets include intellectual property. What objects are classified as intangible assets using examples? If certain criteria are met, intangible assets include, in particular (clause 1 of Article 1225 of the Civil Code of the Russian Federation):

• works of science, literature and art;
• computer programs;
• Database;
• execution;
• phonograms;
• broadcasting by on-air or cable broadcasting organizations;
• inventions;
• utility models;
• industrial designs;
• breeding achievements;
• topologies of integrated circuits;
• know-how;
• brand names;
• trademarks and service marks;
• names of places of origin of goods;
• commercial designations.

However, by citing the examples above for intangible assets, we mean that, on the one hand, any such object can become an intangible asset for an organization. But, on the other hand, it is necessary that it satisfy certain conditions.

Let us recall that such conditions include (clause 3 of PBU 14/2007):

• the ability of the facility to bring economic benefits in the future (for example, the use of the facility in the production of products or in the performance of work);
• the organization has control over the asset (it has the right to receive benefits, and the access of other persons to such an asset is limited);
• the object can be identified, i.e., separated from other assets;
• the object is intended for use for a period exceeding 12 months;
• the property is not expected to be sold within 12 months;
• the original cost of the asset can be reliably determined;
• the object has no material form.

The above means the following. For example, a computer program is an object of intellectual property. Let's say an organization created such a program in-house, but plans to sell the exclusive right to it within the next 12 months. In this case, the long-term requirement is not met, therefore the asset cannot be taken into account as an intangible asset. And if an exclusive software license is purchased, it is an intangible asset if it is planned to be used for a period of more than 12 months in the production of products, performance of work or provision of services.

The above list of assets that may be recognized as intangible assets is not an exhaustive list of examples of intangible assets.

In accounting, as part of intangible assets, a positive business reputation is also taken into account, which may arise when acquiring an enterprise as a property complex, if the price paid to the seller exceeds the sum of all assets and liabilities on the balance sheet of the acquired enterprise on the date of purchase (clauses 4, 42 of PBU 14/2007).

What does not apply to intangible assets (intangible assets)

What can be classified as intangible assets and under what conditions, we indicated above. Therefore, if, for example, an object of intellectual property does not meet any condition for recognition as an intangible asset, it will not be considered an object of intangible property.

• R&D that did not produce a positive result or was not completed and not formalized in the prescribed manner;
• material media in which the results of intellectual activity are expressed;
• financial investments;
• organizational expenses (expenses associated with the formation of a legal entity);
• intellectual and business qualities of the organization’s personnel, their qualifications and ability to work.

Therefore, for example, the answer to the questions “are stocks intangible assets?” or “does the professional experience of employees relate to intangible assets?” will be negative.

The subject of intangible assets (IMA) appeared in the accounting of an enterprise relatively recently. This does not mean that the asset is in any way exotic or rare. The range of accounted intangible assets, on the contrary, is extensive and practically not limited by law, however, the asset must meet certain requirements in order to fall into this category.

At the moment there is no clear definition for this name, guided by the accounting regulations, number 14/07 “Accounting for intangible assets”, a definition of this type can be derived: intangible assets in accounting are an accountable and assessable part of the financial potential of an organization, having no physical form, serving to generate profit over time.

The key characteristic here is the company's ability to prove the legal validity of its claims to ownership of these assets.

Characteristics of intangible assets

The concept of this phenomenon is extremely vague; problems often arise with isolating and separating such assets into a separate category for accounting. It is still possible to identify the main criteria that distinguish intangible assets:

• lack of material and physical form;
• the existence of a high probability of receiving income from the use of this resource;
• the existence of a legally justified right to use and own an asset owned by the organization;
• availability of appraised value;
• prospects for long-term use of the asset.

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The legislation (IFRS 38) identifies the following requirements, compliance with which allows intangible assets to be classified as a separate category: in accounting:

• the ability of an object to generate profit for the organization. At the same time, profitability from intangible assets should be easily distinguishable, separately from other means of production;
• Intangible assets must themselves be a product of production;
• legal confirmation of ownership of the asset;
• obligatory lack of form in an object.

The legal basis for claims to own an asset is a separate requirement and is key here. Confirmation of ownership is necessary not only to obtain benefits from the use of intangible assets, but also to prohibit other participants from such an opportunity.

Examples of intangible assets

As mentioned above, such an intangible asset can be own development of the enterprise, obtained as a result of research activities.

Consider the following example: a company engaged in growing vegetable crops in greenhouses can, at its own expense, develop a number of technologies that will increase the efficiency of the enterprise.

These could be, for example:

• a unique technology for creating hydroponics, the implementation of which will increase the yield;
• automated roof of the building, with inserts of solar panels, ensuring the operation of the enterprise;
• a program for a computer that controls the supply of a useful solution to the roots and the movement of the roof sashes depending on solar activity;
• registered trademark “Products of the Sun”, reflecting the production model at this enterprise.

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All intangible assets from the list can be developed by the company independently or acquired externally.

What are intangible assets and what methods of depreciation exist, you can find out in the following video:

1. Concept, composition and assessment of intangible assets. Documentation of intangible assets

Intangible assets(Intangible assets) are objects of long-term use (more than 12 months), which do not have a tangible form, but have a valuation and generate income.

Intangible assets include:

Exclusive rights of the patent holder to inventions, industrial designs, utility models and breeding achievements;

The exclusive rights of the owner to the trademark and service mark, the name of the place of origin of goods;

Business reputation of the organization;

Rights arising from copyright and other contracts for works of science, literature, and art;

Rights to know-how;

Organizational expenses associated with the formation of a legal entity;

Rights to use natural resources, etc.

Do not apply to intangible assets:

* intellectual and business qualities of personnel, their qualifications;

* organizational expenses associated with the formation of a legal entity.

Intangible assets are divided into the following groups:

Intellectual property objects are the results of intellectual activity and equivalent means of individualization of a legal entity, goods, works, services and enterprises that are provided with legal protection. They are divided into:

Regulated by patent law;

The business reputation of an organization arises in connection with the acquisition of an enterprise as a property complex. It happens:

* positive (surcharge to the price for the name of the company)

* negative (discount from price).

Assessment of intangible assets.

In accounting, intangible assets are reflected at the original, residual and revalued cost.

Initial cost defined for objects:

Acquired for a fee from other organizations and individuals - at the actual costs incurred for acquiring objects and bringing them to a state suitable for use;

Contributed to the contribution to the authorized capital - at the agreed value;

Received free of charge from other organizations and persons - at market value as of the date of capitalization;

Created at the enterprise - in the amount of actual costs.

Intangible assets are accepted for accounting purposes at their original cost; they are reflected in the balance sheet at their residual value.

Residual value Intangible asset is a calculated value obtained by subtracting depreciation from the original cost accumulated over the entire period of operation.

Overvalued. Revaluation of intangible assets can only be carried out by commercial organizations at the current market value, but at least once a year (at the beginning of the reporting year).

The amount of the additional valuation of the original cost and depreciation is credited to account 83 “Additional capital”, and the amount of the writedown - to account 84 “Retained earnings, uncovered loss”

NMA documentation.

Documents used for accounting for intangible assets:

Certificate of acceptance of intangible assets;

Certificate of write-off of intangible assets;

Intangible asset registration card.

2. Synthetic and analytical accounting of receipts and disposals of intangible assets

Accounting for intangible assets is maintained on the active, balance account 04. The debit of account 04 reflects the balance and receipt of intangible assets, and the credit reflects the disposal.

Intangible assets can be received through:

Purchases for a fee:

D T 08 K T 76 - for the purchase price;

D T 19 K T 76 - for the amount of VAT;

Created on our own and with the involvement of third parties on a contract basis:

D T 08 K T 10.70.69 - for the amount of actual costs;

Acquisitions on exchange terms;

Receipt from the founders on account of the contribution to the authorized capital of the organization:

D T 08 K T 75.1 - at the agreed cost;

D T 04 K T 08 - commissioning;

Free admission:

D T 08 K T 98.2 - at the current market value;

D T 04 K T 08 - commissioning;

D T 98.2 K T 91 - we write off the amount of future income for the amount of monthly accrued depreciation.

Admission for joint activities:

D T 08 K T 80 - at the agreed price;

D T 04 K T 08 - commissioning.

According to Article 159 of the Tax Code of the Russian Federation, the initial cost of intangible assets created for one’s own needs is subject to VAT. The amount of VAT paid to suppliers of resources that were used in the creation of intangible assets is subject to reimbursement from the budget.

Intangible assets may be disposed of for the following reasons: sale; free transfer; transfer as a contribution to the authorized capital of other organizations; termination of the validity period of a patent, certificate; write-off due to loss of income properties; write-off of intangible assets as a contribution to the authorized capital of other organizations; when transferring intangible assets as a contribution to joint activities. The basis for write-off is transfer acts, write-off acts, minutes of shareholders’ meetings, etc.

Accounting for the disposal of intangible assets is kept on active-passive account 91 “Other income and expenses”:

1. Residual value of intangible assets:

D T 05 K T 04 - write-off of accrued depreciation;

D T 91 K T 04 - write-off of residual value.

2. Expenses associated with the disposal of intangible assets: D T 91 K T 70,71,69.

3. The amount of VAT on sold intangible assets: D T 91 K T 68.

4. Proceeds from the sale of intangible assets at negotiated prices, including VAT: D T 62 K T 91.

5. Financial result from writing off intangible assets:

Profit D T 91 K T 99;

Loss D T 99 K T 91.

3. Amortization of intangible assets

Accounting for depreciation of intangible assets is kept on the passive, balance, regulating account 05. On the credit side, the accounts reflect the balance and the accrual of depreciation charges. D t 20,25,26,44 K t 05.

By debit - write-off of depreciation charges upon disposal of intangible assets: D t 05 K t 04.

The cost of intangible assets is repaid through depreciation. Depreciation of intangible assets is intended to compensate for the costs incurred by the organization during their acquisition and to ensure the formation of a source of financing for future acquisitions of relevant assets.

Depreciation of intangible assets is calculated in one of the following ways:

Linear - by dividing the initial cost of the asset by its useful life in months;

Reducing balance - calculated using the formula

Residual value of intangible assets at the beginning of the year * coefficient

Remaining useful life

The coefficient value should not exceed 3;

By writing off the cost in proportion to the volume of production:

Initial Natural indicator

cost of intangible assets * production volume per month

Estimated production volume for the entire

useful life.

In tax accounting, depreciation of intangible assets is calculated:

Linear method - the amount of depreciation of intangible assets per month is determined as the product of its original cost and the depreciation rate

The depreciation rate is determined by the formula: 1/ useful life * 100%

In a non-linear way - the amount of monthly depreciation is determined by the formula:

A = B * N/100,

where A is the amount of accrued depreciation for the month for the corresponding depreciation group;

B is the total balance of the corresponding depreciation group;

N is the depreciation rate for the corresponding group.

4. Inventory of intangible assets

The Regulations on Accounting and Reporting establish that an inventory of intangible assets is carried out no more than once a year before drawing up an annual report.

The purpose of the inventory is to identify the actual presence and qualitative condition of the enterprise’s intangible assets, check technical documentation, and clarify accounting data.

The inventory is carried out by a commission appointed by order of the head of the organization. As a result of the inventory, an inventory list is compiled (f. Inv. No. - 1) in one copy.

The inventory is signed by the commission, the financially responsible person and transferred to the accounting department. In accounting, inventory data is compared with accounting data (they are taken from inventory cards) and a matching sheet is drawn up, in which shortages or surpluses are determined.

Synthetic accounting of intangible assets inventory is prepared with the following accounting entries:

The surplus comes to the market price as previously unaccounted for fixed assets that were in operation, and is credited to the financial results: D T 04 K T 91.

Shortages and other fixed assets are written off from the balance sheet using the following entries:

a) at the original cost: D T 04.5 K T 04.

b) for the amount of accrued depreciation: D T 05 K T 04.5.

c) for residual value: D T 94 K T 04.5.

d) the shortage is written off to the guilty person at market value:

* for residual value: D T 73.2 K T 94.

* for the amount of the difference between the market price and the residual value: D T 73.2

K T 98.4.

As the guilty party compensates for the shortfall: D T 50, 70 K T 73.2, at the same time the share of deferred income is written off: D T 98.4 K T 91.

If the specific culprit of the shortage is not identified, then the residual value is written off as other expenses of organizations: D T 91 K T 94.

Their main goal is to make a profit in the process of activity. You need to know what types of intangible assets there are, why they are needed, and how to properly organize accounting.

Basic moments

Intangible assets are used by an organization for a long time. In order for a tool to be recognized as an intangible asset, it must meet a number of requirements:

• lack physical fitness;
• be used in the production and sales process or for management needs;
• be in use for at least a year;
• generate income now or in future activities;
• meet legal requirements regarding the execution of documents;
• have the ability to move from one individual (or legal entity) to another.

To use intangible assets, an organization must have ownership rights to them. The main question is whether these assets are subject to depreciation? They have no physical form, so how can they wear out?

Depreciation represents obsolescence. When determining the amount of deductions, the following nuances must be taken into account:

The linear method is suitable for any property. Its service life, the amount of income generated and other indicators do not affect this. The method is used when the exact period of operation cannot be determined, and it is impossible to forecast profits in the future.

The reducing balance method is used for those assets that will provide the greatest benefit during the first time they are used. The production method is the most flexible. It depends on the quantity of products manufactured.

To register a property, you need to know its value. In accounting, such assets are shown at their original cost.

The actual amount that was spent on the purchase of assets includes the debt for (for the creation or) and the net value of this intangible asset.

Once the cost has been established, the useful life needs to be determined. The duration of the rights to the property is taken as the basis. The period may be indefinite or limited.

In the first case, it is better to stop at 20 years. To collect information about property, account 04 is used - it indicates the types of assets, their value and transactions.

Upon receipt of property, it is necessary to draw up a deed. Depending on the method of receipt, assets are displayed differently:

Assets may be disposed of for the following reasons:

• the object is written off due to unsuitability, loss of profit-generating qualities;
• assets are put up for sale;
• the object is transferred free of charge to another organization;
• the asset object is made as a contribution to the authorized capital of the enterprise.

According to IFRS, an intangible asset can be identified under the following conditions:

If an intangible asset is created by a company independently, then it goes through 2 stages - research and development. The first includes:

• activities the purpose of which is to obtain new information;
• search, evaluation of methods for applying the obtained research results;
• search for the necessary raw materials;
• selection of improved materials.

The second stage is as follows:

• design and test new models;
• operation of pilot plants;
• testing of those materials that were selected.

The following are not intangible assets:

• the reputation of the organization that it has earned over the entire period of activity;
• employees of the organization and the costs spent on their training;
• company clients, regular customers;
• advertising expenses.

Necessary concepts

What is their role

Intangible assets are necessary to confirm ownership of a certain object. They have a cost estimate, so their main goal is to generate income for the organization.

When using intangible assets, an organization has the opportunity to change the capital structure. With an increase in the share of intangible assets, the competitiveness of products and services increases.

Current regulatory framework

Regulations and laws to be followed:

1. Parts 1 and 2 of the Civil Code.
2. Parts 1 and 2 of the Tax Code.

Emerging nuances

The enterprise must have the right to benefit from the economic benefits that the asset may provide. It is also necessary to have documentation confirming the presence of the asset and to protect the object.

During the year, the organization must not sell the asset. Once a year it is allowed to revaluate intangible assets.

What applies to them

An example of intangible assets is:

• rights to an invention, established design - patent;
• copyright;
• property rights;
• the owner’s right to the sign, use of the name of the object, etc.;
• rights to achievements.

Also included in intangible assets is the organization's business reputation and costs associated with these objects.

The right to assets may arise due to:

• patent;
• constituent document;
• purchase and sale agreements.

Objects, which are intangible assets, are divided into several subgroups:

What are the types

There are many types of intangible assets (intellectual property) - copyrights, utility models, industrial designs, etc.

Such edits apply to any work – published or not, scientific or cultural.

The objects in this case are:

• literary, screenplay work;
• choreographic, pantomime;
• audiovisual;
• painting, sculpture, graphics and design;
• arts and crafts;
• architecture, photography.

A patent is the right to use, manufacture or sell products based on it for a specific period of time. It is equal to 20 goals since the application was written. Objects are devices, methods, substances, etc.

A useful model is the implementation of consumer goods and their components. If the model is new, then security is assigned to it. Can be used for industrial purposes. The rights to the model must be confirmed by a special certificate.

An industrial design is an artistic solution that determines the appearance of a product. Distinctive features are novelty and originality. Such a sample is confirmed by a patent, the protection period of which is 5 years.

Trademarks are also a type of intangible asset. They indicate who is responsible for the quality of the goods that are offered to people.

The sign also performs the following functions:

• indicating to customers the quality of the product;
• recognition of specific products;
• determination of the owner of the goods.

A license is issued to a legal entity or individual. She is also an NMA. Validity period: at least 3 years.

Useful life of intangible assets

As soon as an object is accepted for accounting, the organization must determine its useful life. This is the period during which the company plans to use the object in its activities so that it generates income.

When determining the period, the following must be taken into account:

• validity period of intellectual property rights;
• expected period of use of the object.

The accountant must correctly determine this period, since it is necessary for calculating depreciation of assets. For some types of objects, the period may be accrued depending on the number of products manufactured or rendered.

Each year, the deadlines must be checked for clarification. If the period of use of an object is changed, then the useful life must be changed.

If it is not possible to determine the period for an intangible asset, then it is classified as an intangible asset with an indefinite validity period. It cannot be depreciated; the company must establish factors every year that indicate the impossibility of determining the period.

If such factors are absent or cease to operate, then it is necessary to determine the period and calculate depreciation. Also, the useful life may be indicated in the documentation that is issued when transferring rights to this asset.

Thus, intangible assets are objects that do not have a physical form. This could be a right, a patent, a design, etc. Their goal is to bring profit to the organization. Intangible assets are subject to accounting and are subject to depreciation.