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As-26 intangible asset

Indian Accounting Standards 1654 views 4 replies

can a company change the amortization period of an intangible asset if decided once ?  pls help

Replies (4)

The relevant excerpts of AS26 regarding teh change in the amortization period given below:

In some cases, there may be persuasive evidence that the useful life ofan intangible asset will be a specific period longer than ten years. In thesecases, the presumption that the useful life generally does not exceed tenyears is rebutted and the enterprise:

(a) amortises the intangible asset over the best estimate of its useful life;

(b) estimates the recoverable amount of the intangible asset at leastannually in order to identify any impairment loss (see paragraph

83); and

(c) discloses the reasons why the presumption is rebutted and the

factor(s) that played a significant role in determining the useful

life of the asset (see paragraph 94(a)).

quite right ....but m asking that suppose a company purchased an intangible asset on 01.04.2008 at that time the comapny decides 8 years as  the useful life of the asset...now on 01.04.2011 the company want to change the useful life means the amortization period from 8 years to 10 years can the comapny do so.......

There is an rebuttable presumtion that the usefl life of the intangible asset would not exceed 10year unless it is otherwise whihc can be increased beyong 10years.  But in your case it is to be increased to 10years only, so it can be done, provided you have evidence that the useful life is 10 years.

SO WE CAN CHANGE THE AMORTIZATION PERIOD.......RIGHT....MAXIMUM EXTENT TO 10 YEARS...


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