Trademark and copyright expenses treatment

How do we need to treat the expenses of trademark and copyright. Whether the same needs to be capitalised or booked as revenue expense ?

And if capitalised as intangible assets, what is the rate of depreciation for the same?

Thanks & Regards
Replies (4)
Quick Summary
This discussion explores the accounting treatment for trademark and copyright expenses. The consensus leans towards capitalising these costs as intangible assets when there's a clear economic benefit and reliable estimation, often following IndAS 38 guidelines. While some suggest treating them like goodwill (not depreciated), others propose amortisation, typically using the straight-line method with specific rates for the recognition year and subsequent periods. Minor costs, like registration fees, may be expensed if immaterial.

You may treat them as goodwill .

Good will is not subjected to depreciation

Hi, the amortisation method depends upon the pattern of consumption and it’s usually straight line method. Here, 25% is the allowable rate in the recognition year and wdv 25% in the subsequent years. You will capitalise them when there is an economic benefit and a reliable estimate available IndAS 38.21. It is initially measured at cost.

Hi, @ Eswar Reddy S first part is also correct but only to the extent of writing off. Eg. if someone buys an intangible asset for 10,000₹ and it’s useful life is ten years, but purchased it in the middle of the year, then, the six months can be amortised and the other first six months can be expensed as scrap value is of no use when there is no intention to classify the asset as held for sale. Or else, this can be adjusted as half year by the end of its useful life instead of expensing it  This is my assumption only.

Basic rights are available to the creator of the artwork for free. Unlike patents and trademarks, copyrights have only one identifiable cost: the small fees paid to the US Copyright Office to establish the rights. These fees are typically expensed in the current period if they are immaterial.

 

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