I saw an item named as "Customer Relationship" on the Balance Sheet of a company, which was under Intangible Asset.
How it has apperad there? I mean what accouting entry is passed.
How the valuation of "Customer Relationship" is done?
Menu
Accounting for customer relationship
Replies (1)
An entity can recognised the customer relationship as Intangible assets, if company has legal right or contractual control over the customer or over the loyalty of the customer.
Accounting entry will be Customer Relationship Debit and Cash account Credit
Refer the accounting policy of Heineken N.V. (2011) this is on IFRS (no gaap difffeence on this matter)
Customer-related and contract-based intangibles are capitalised if they meet the definition of an intangible asset and the recognition criteria are satisfied. If the amounts are not material these are included in the brand valuation. The relationship between brands and customer-related intangibles is carefully considered so that brands and customer-related intangibles are not both recognised on the basis of the same cash flows.
Recent Topic
- Free GST invoice tool I built for my practice R
- Clarification on Gratuity Exemption under Section
- GOODS AND SERVICE TAX - GSTR 1
- Correct ITR form
- Clarification required on Section 393 & Report
- Professional advance taxes
- Surrender pan process
- Tds on deceased's pan
- Exempt income declaration schedule EI in ITR2 (AY2
- Mold cost invoice in GST return
Related Topics
CAclubindia
