Depreciation is not charged on intangible assets. Accounting for amortization of intangible assets
When putting on the balance sheet, the organization must determine the period useful use intangible asset or make a decision that it is impossible to determine it (paragraph 25 of PBU 14/2007). Useful life intangible assets determine based on:
- the period during which the organization will own exclusive rights to the object. This period is indicated in documents of title (patents, certificates, etc.) or it follows from the law (for example, the exclusive rights of the manufacturer of the database are valid for 15 years (Article 1335 of the Civil Code of the Russian Federation));
- the period during which the organization plans to use the facility in its activities;
- the quantity of products or other natural measure of the amount of work that the organization intends to obtain using this asset.
If it is impossible to determine the useful life for an object of intangible assets, then there is no need to charge amortization for them (clause 23 of PBU 14/2007). Such objects are called assets with an indefinite period of use (paragraph 25 of PBU 14/2007). The factors hindering the determination of the useful life are listed in the Notes to Balance sheet and the Statement of Results (clause 41 of PBU 14/2007). There is also no need to amortize the intangible assets of a non-profit organization (clause 24 of PBU 14/2007).
Start of depreciation
Charge depreciation from the month following the month in which the items were recognized as intangible assets. In the future, charge amortization on a monthly basis, regardless of the results of the organization's activities. Such rules are in clauses 31 and 33 of PBU 14/2007. During the useful life of an intangible asset, amortization is not suspended (paragraph 2, clause 31 of PBU 14/2007).
Termination of depreciation
Discontinue depreciation from the month following the month in which the intangible asset was extinguished or written off from accounting(Clause 32 PBU 14/2007).
Accounting for amortization of intangible assets
Depending on the nature of the use of an intangible asset, include the amortization accrued on it either in the composition of expenses for common types activities, either in the composition of other expenses, or in the composition capital investments... In this case, do the postings:
Debit 20 (23, 25, 44 ...) Credit 05
- depreciation is charged on intangible assets used in the production of goods (performance of work, provision of services) or in trading;
Debit 08 Credit 05
- depreciation is charged on intangible assets used in the creation (modernization, reconstruction) of other non-current assets;
Debit 91-2 Credit 05
- amortization is accrued on intangible assets used in other types of activities (for example, on intangible assets provided for use by other persons).
Straight line amortization of intangible assets
For amortization linear way you need to know the initial cost of the intangible asset (current market value if the asset is revalued) and its useful life. The organization is obliged to apply this method to amortize goodwill (paragraph 44 of PBU 14/2007)
Determine the amount of depreciation for the month using the formula:
The linear method of calculating the amortization of intangible assets is used in both accounting and tax accounting. The advantage of the straight-line depreciation method is its ease of use: the cost of an intangible asset is repaid on a straight-line basis throughout its useful life. Therefore, it is used in cases where it is difficult to predict future receipts from the use of an asset (paragraph 28 of PBU 14/2007). In addition, the use of the straight-line method in accounting and tax accounting will avoid temporary differences.
Example
CJSC "Alpha" acquired exclusive rights to Predict the volume of production and sales of products in which this trademark will be used, the organization cannot. Therefore, it was decided to depreciate the object in a linear way, both in accounting and in tax accounting. The initial cost of exclusive rights, formed in accounting and tax accounting, is the same and amounts to 500,000 rubles.
The useful life of the exclusive rights to a trademark in accounting and taxation is 11 years (132 months).
The amount of monthly depreciation in both accounting and tax accounting was:
RUB 500,000 : 132 months = RUB 3788
VAT when switching from simplified taxation system to taxation system
.
Non-profit organization accounting
.
Division Property Tax Declaration
.
Acquisition of real estate
.
Criteria for controlled transactions
.
Standard birth deduction
.
Information about counterparties
.
Advance payment in EURO and settlements in
.
Average number of individual entrepreneurs
Use of employees' property
Intangible assets with a definite useful life are amortized in accounting. The cost of intangible assets (intangible assets) recognized as depreciable property for the purpose of calculating income tax is written off to expenses through depreciation and tax accounting. About the established accounting and tax legislation We will tell you how to calculate the depreciation of intangible assets in our consultation.
Accounting methods of amortization of intangible assets
In accounting, amortization on intangible assets is calculated in the following ways (clause 28 of PBU 14/2007):
- linear method (I);
- diminishing balance method (II);
- method of writing off the cost in proportion to the volume of products (works) (III).
The organization determines the method of amortization of a specific intangible asset independently, based on the expected receipts of future economic benefits from the use of the asset. If it is impossible to reliably estimate the future economic benefits from intangible assets, the straight-line depreciation method is applied.
In this case, the chosen method of calculating the depreciation of intangible assets may be changed if the calculation of future economic benefits from the object of intangible assets has changed significantly (clause 30 of PBU 14/2007).
Let us present in the table how the monthly amount of depreciation (intangible assets M) is calculated for an object of intangible assets in all three ways (clause 29 of PBU 14/2007):
I | II | III |
---|---|---|
NMA M = S P (R) / SPI | NMA M = O M * K / SPI O | NMA M = C P * V M / V SPI |
S P (R)- initial or current market (in case of revaluation) value of intangible assets;
SPI- useful life of the intangible asset in months;
About M- residual value intangible assets at the beginning of the month;
TO- the coefficient is not higher than 3, established by the organization;
SPI O- remaining SPI in months;
S P- the initial cost of intangible assets;
V M- a natural indicator of the volume of production (work) per month;
V SPI- the estimated volume of production (work) for the entire SPI of the intangible asset.
Let us recall that the amortization of intangible assets is charged from the first day of the month following the month of accepting the asset for accounting, until the cost is fully paid off or the asset is written off the balance sheet. At the same time, during the SPI, the accrual of depreciation is not suspended (clause 31 of PBU 14/2007).
How the SPI for intangible assets is determined in accounting and tax accounting, we told in.
Examples of calculating depreciation amounts
Here are examples of calculating the amount of monthly depreciation of an object of intangible assets with an initial value of 172,800 rubles, taken into account on 06/27/2017, in the accounting of an organization. The SPI for an intangible asset is set equal to 3 years.
I. Linear method:
NMA M = 172 800/36 = 4 800 (rubles)
In the event that the object is not revalued, and the SPI and the depreciation method are not revised, monthly, starting in July 2017, for 36 months, depreciation in the amount of RUB 4,800 will be reflected in the organization's accounting records.
II. Decreasing balance method:
Suppose the organization has set the acceleration factor to 2.
Thus, for July 2017 the amount of accrued depreciation will be:
IA 7 = 172 800 * 2/36 = 9 600 (rubles)
In August 2017, the amount of monthly depreciation will decrease:
IA 8 = (172 800 - 9 600) * 2/35 = 9 326 (rubles)
For September 2017:
IA 9 = (172 800 - 9 600 - 9 326) * 2/34 = 9 051 (ruble), etc.
III. Method of writing off the cost in proportion to the volume of products (works):
Suppose that the volume of products planned for production due to the use of the intangible asset facility will amount to 950,000 pieces in 3 years.
For example, in July 2017, the actual production volume was 7,000 units, and in August - 38,000 units.
Therefore, depreciation for July 2017 will be:
IA 7 = 172,800 * 7,000 / 950,000 = 1,273 (rubles)
And for August 2017:
IA 8 = 172,800 * 38,000 / 950,000 = 6,912 (rubles)
Depreciation methods in tax accounting
There are only two methods for calculating the amortization of intangible assets for the purpose of calculating income tax (clause 1 of article 259 of the Tax Code of the Russian Federation):
- linear method;
- nonlinear method.
For intangible assets with a useful life of more than 20 years, it is necessary to apply exclusively the straight-line depreciation method. For the rest of the objects, the organization can choose: use the linear method as well, or apply a non-linear method to all of them. At the same time, it is possible to switch from the non-linear method of depreciation to the linear method no more often than once every 5 years (clauses 1, 3, article 259 of the Tax Code of the Russian Federation).
Depreciation for intangible assets begins to be charged in tax accounting from the 1st day of the month following the month in which such an object was put into operation (clause 4 of article 259 of the Tax Code of the Russian Federation).
When using the straight-line method for calculating amortization of intangible assets, the amortization amount is calculated for each object in the same way as described above using the straight-line method in accounting.
With the non-linear method, monthly depreciation is calculated for each depreciation group in the manner prescribed by Art. 259.2 of the Tax Code of the Russian Federation, according to the following formula (clause 4 of Article 259.2 of the Tax Code of the Russian Federation):
NMA MG = B * K / 100,
where intangible assets MG is the amount of depreciation charged for the month for the corresponding depreciation group;
B - the total balance of the corresponding depreciation group;
K is the depreciation rate for the corresponding depreciation group.
Monthly depreciation rates for each depreciation group are set in clause 5 of Art. 259.2 of the Tax Code of the Russian Federation and are, for example, for the 1st depreciation group - 14.3%, and for the 7th - 1.3%.
Depreciation of intangible assets forms accounting and tax expenses... An erroneous amount of amortization of intangible assets leads to tax arrears and inaccurate reporting. Check your intangible assets.
Read in the article:
Intangible assets are intangible objects, most often rights, without a limit in value and with a service life of more than 12 months, if their owner:
- Assumes to use intangible assets:
- in the production of products, works, services;
- when selling goods;
- for management purposes;
- for other businesses.
- Has documents confirming the existence of the object - evidence of exclusive, licensed rights or other documents, for example:
- patent;
- certificate for the object of individualization, etc.
- Can reliably estimate the value of intangible assets.
- Eligible to benefit from the exploitation of an intangible asset.
- Not going to sell the object.
Most often, intangible assets include intellectual property named in the Civil Code of the Russian Federation. Read about this in Table 1.
Table 1. Intangible assets in accounting and tax accounting
Intangible assets | Tax accounting | Accounting |
Right to:
|
Yes | Yes |
Eligibility for a computer program, database | Yes | Yes |
The right to chip topology | Yes | Yes |
The right to the object of individualization:
|
Yes | Yes |
Right selection results | Yes | Yes |
The right to works of science, literature, art, audiovisual works, phonograms, etc. | Yes | Yes |
The right to know-how | Yes | Yes |
Business reputation of the company | No | Yes |
As for the rights to other similar objects that are not related to intellectual property, they can be reflected in accounting as intangible assets only if:
- The owner has documents about:
- the existence of the object;
- ownership of the object to the owner.
- The access of other persons to the use of the object is limited.
For which intangible assets are not depreciated
Depreciation of intangible assets is prohibited in two cases.
Case 1. For objects without the deadline exploitation.
With any method of depreciation, it is charged over the life of the facility for production, management or other business purposes. But for some intangible assets it is impossible to establish the term of use. This can be, for example, a movie, a logo, a piece of literature, etc. With an indefinite period of operation, it is impossible to calculate monthly amount depreciation and expense.
It is not profitable for the owner of intangible assets to "lose" expenses, and besides, it is possible that after some time he will be able to determine the period of use of the object. Therefore, PBU 14/2007 established a mandatory annual review of the situation and identifying the possibility of determining the period of use of an intangible asset. After that, the depreciation of intangible assets is allowed.
Case 2. For intangible assets of non-commercial legal entities.
On accounting expenses by depreciation, the cost of intangible assets is written off - that is, the costs of purchasing, manufacturing, receiving, other receipt, registration, etc. In order to correctly calculate depreciation, you must first correctly determine the value of the intangible asset, including all eligible costs. Read about this in table 2.
Table 2. Depreciation of intangible assets in accounting
Expenses | Purchase of intangible assets | Creation of intangible assets |
The contract price of the object | Yes | Yes |
Customs duties | Yes | Yes |
Customs duties | Yes | Yes |
Patent Fees | Yes | Yes |
Non-refundable VAT | Yes | Yes |
Price information services and consultations | Yes | Yes |
Mediator's fee | Yes | Yes |
Other costs in connection with the purchase | Yes | No |
Contractor remuneration | No | Yes |
Authors' remuneration | No | Yes |
R&D fees | No | Yes |
Employee salary | No | Yes |
Mandatory contributions from employees' salaries | No | Yes |
Depreciation of fixed assets and other intangible assets | No | Yes |
Equipment maintenance and repair | No | Yes |
Other costs of creating intangible assets | No | Yes |
Reimbursable VAT | No | No |
Interest on loans and credits | No, except for investment intangible assets | |
R&D costs of previous years | No, if they are charged to other expenses | |
General operating costs | Yes, if they relate to the purchase of intangible assets | Yes, if they relate to the creation of intangible assets |
Example 1
Depreciation of intangible assets in accounting
LLC Symbol, working for OSN, acquired the exclusive right to a trademark, paying for:
- consultations - 90,000 rubles. (without VAT);
- remuneration to the copyright holder - 354,000 rubles, including VAT of 54,000 rubles;
- daily allowance for a business traveler who conducted negotiations - 6000 rubles.
The depreciation of intangible assets "Symbol" will be calculated from the cost of 396,000 rubles. (90,000 rubles + 354,000 rubles - 54,000 rubles + 6000 rubles).
Depreciation write-off of intangible assets starts from next month after the object was reflected on account 04 "Intangible assets". During the operation of the facility, it is depreciated every month, regardless of the profitability or unprofitableness of the business. The amortization recognition of expenses ends from the next month after the object:
- written off from accounting (for example, due to disposal);
- fully cushioned.
There are only three ways in accounting:
Method 1. Linear.
Example 2
Depreciation of intangible assets in accounting
Let's continue Example 1 and assume that the trademark has a lifespan of 11 years, that is, 132 months. The "Symbol" accountant determined the monthly linear write-off in the amount of 3000 rubles. (396,000 rubles / 132 months).
Method 2. Reduced balance.
Example 3
Methods for calculating amortization of intangible assets
Let's supplement the condition of example 2. Suppose that “Symbol” writes off the value of intangible assets by the method of decreasing balance with a coefficient 2. The depreciation amounts for the first three months of ownership of the trademark are shown in the table.
Period Remaining term in months Remaining intangible assets value at the beginning of the month Amortization amount Remaining intangible assets value at the end of the month 1 month 132 396,000 RUB 6000 RUB 390,000 RUB 2 month 131 390,000 RUB 5954 p. 384,046 p. 3 month 130 384,046 p. 5908 p. 378,138 p.
Method 3. Proportional to the volume of sales.
Example 4
How amortization is calculated on intangible assets
Let us take as a basis the condition of example 2 and assume that "Symbol" writes off the value of intangible assets in a proportional way, setting the volume of sales using the trademark at 500,000 units. Amortization amounts for the first three months of ownership of a trademark are shown in the table.
Period Monthly sales Amortization amount Dt 1 month 5000 units 3960 p. CT Type of use of intangible assets 20 (23, …) 05 In the production of products, works, services 26 05 For management purposes 44 05 When selling goods 08 05 To create a fixed asset or other intangible assets 91-2 05 For transmission non-exclusive rights to others Example 5
Depreciation of intangible assets
In the situation from example 2, the "Symbol" accountant reflects the operation every month:
Debit 44 Credit 05
3000 RUB - monthly write-off.
And in the situation from example 3, if "Symbol" temporarily transferred the right to use the trademark to another company, the "Symbol" accountant reflects the write-off on account 91-2:
Debit 91-2 Credit 05
6000 RUB - writing off the cost of intangible assets in the first month.
Attached files
- Directory of intangible assets.doc
- Form statement of depreciation.doc
- Sample statement of depreciation.doc
In accordance with clause 14 of PBU 14/2000, the cost of intangible assets is redeemed through depreciation. PBU 14/2000 provides. That for commercial organizations, through amortization, the value of intangible assets of any kind is repaid.
AMORTIZATION is an accounting, carried out according to certain rules, of the gradual transfer of part of the costs associated with the acquisition of depreciated property to the costs of production or circulation.
The procedure for calculating amortization on intangible assets and its accounting is determined in the following documents:
in the Regulations on Accounting and accounting statements in the RF;
in PBU 14/2000;
in the Instructions for the use of the Chart of Accounts.
In order for an enterprise to have the right to amortize the rights belonging to it - intangible assets, the following conditions must be met:
the rights of the organization must be documented and meet the requirements of civil law;
the rights must be used in the economic activity of the organization for a long period (over one year);
rights must generate income for the organization;
they should be used in the absence of the statutory activities of the enterprise;
intangible assets should not belong to the category of those intangible assets that are not subject to cost redemption (depreciation).
If the above conditions are met, then according to PBU 14/2000, the amortization of intangible assets is calculated at the rates calculated by the organization itself based on the initial cost and useful life of certain intangible assets.
Depreciation rate - percentage expressed original cost intangible assets to be included in the current costs of production or circulation (for example, for a month).
The useful life is the period during which the use of an intangible asset brings economic benefits (income) to the organization. For certain groups of intangible assets, the useful life is determined based on the amount of production or other natural volume indicator expected to be received as a result of using this item.
The useful life of intangible assets is determined by the organization when the object is accepted for accounting by one of two possible options:
expert, in which the expert can be either an organization stepping in the right to use an intangible asset, or a specialist - appraiser;
calculated, in which the organization independently calculates the useful life of the intangible asset.
The useful life of intangible assets is determined by:
based on the validity period of the patent, certificate and other restrictions on the terms of use of intellectual property objects in accordance with the legislation of the Russian Federation;
based on the expected life of this item.
When using the first method, the useful life coincides with the validity period of the title of protection (patent, certificate, etc.) or with the validity period of the license agreement. To determine the useful life of intangible assets, it is necessary to know the duration of the title of protection.
When using the second method, the organization independently determines the expected useful life, during which it can receive economic benefits, and approves it with an organizational and administrative document (order or order of the head of the organization).
For intangible assets, for which it is impossible to determine the period of use, the rates of depreciation are established per 20 years (but not more than the period of the organization's activity).
The useful life of intangible assets cannot exceed the life of the organization. Unlike items of fixed assets, intangible assets do not have terms or norms established in a centralized manner.
Basic rules for amortization of intangible assets:
depreciation is not charged, in accordance with clause 56 of the "Regulations for accounting and financial reporting in the Russian Federation", for intangible assets of non-profit organizations;
depreciation is not charged on the intangible assets of other persons, namely, on intellectual property that does not belong to the organization, but is used by the organization on the basis of the rights to use intellectual property objects provided to the organization by rightholders under license and other agreements, and recorded on the off-balance sheet account.
amortization of intangible assets is charged regardless of the results of the organization's activities in the reporting period;
during the useful life of intangible assets, the accrual of amortization deductions is not suspended, except in cases of conservation of the organization;
in practical terms, depreciation is first calculated on an annual basis, and during the reporting year depreciation deductions for intangible assets are charged on a monthly basis, regardless of the accrual method used in the amount of 1/12 of the annual amount (except for cases when amortization is charged in proportion to the volume of products produced).
in seasonal production annual amount depreciation charges on intangible assets are charged evenly during the period of the organization's work in the reporting year;
depreciation deductions for intangible assets are made starting from the first day of the month following the month of accepting this object for accounting, and are charged until the cost of this object is fully paid off or this object is retired from accounting in connection with the assignment of exclusive rights to the results of intellectual activity by the organization;
depreciation charges on intangible assets stop from the first day of the month following the month of full repayment of the cost of this object or writing off this object from the accounting records;
depreciation charges on intangible assets are reflected in the accounting records of the reporting period to which they relate;
the application of one of the methods for calculating depreciation for a group of homogeneous intangible assets is carried out throughout their entire useful life;
the organization should be used for each intangible asset only one of the methods of depreciation, which is determined at the time of its registration and does not change during the entire period of use or its disposal;
the value of the rights to the following intellectual property objects is not redeemed:
PBU 14/2000 provides several methods for calculating depreciation charges:
linear method;
diminishing balance method;
method of writing off the cost in proportion to the volume of products (works).
The application of one of the methods for a group of homogeneous intangible assets is carried out throughout their entire useful life and is not subject to change. The methods used for calculating amortization for individual objects of intangible assets should be reflected in accounting policy organizations. The annual amount of accrual of depreciation deductions is determined:
with the linear method - based on the initial cost of intangible assets and the depreciation rate calculated on the basis of the useful life of this object;
in the case of the diminishing balance method - based on the residual value of intangible assets at the beginning of the reporting year and the depreciation rate calculated on the basis of the useful life of this object;
with the method of writing off the cost proportional to the volume of production (work), the annual amount is not determined and the amortization deductions are calculated based on the natural indicator of the volume of production (work) in the reporting period and the ratio of the initial value of the intangible asset and the estimated volume of production (work) for the entire useful life of the intangible asset.
According to clause 21 of PBU 14/2000, depreciation charges on intangible assets can be reflected in accounting in one of two ways:
accumulation of the corresponding amounts on a separate account - for K05;
a decrease in the initial value of the object of an intangible asset - directly on K04.
In the first method, according to the Chart of Accounts, account 05 is used to summarize information on depreciation accumulated during the use of objects of intangible assets (with the exception of objects for which depreciation charges are written off directly to K 04).
Compensated through depreciation. Depreciation of intangible assets (intangible assets) allows you to gradually transfer the value of assets to.
Depreciation of intangible assets is charged on a monthly basis, the calculated deductions are written off to the company's expenses. How the amortization of intangible assets is accounted for, what methods of accrual exist and what postings are made in accounting - we will analyze these issues in more detail.
Amortization of intangible assets
First of all, it should be noted that the calculation of amortization of intangible assets is regulated by PBU 14/2007.
When accepting an intangible asset for accounting, it is necessary to determine the period during which the object can be used, receiving from it economic benefit, that is, the useful life.
It should be noted that there are intangible assets for which it is not possible to determine this period, for such objects depreciation is not charged.
We begin to accrue depreciation starting from the month that comes after the month when intangible assets are accepted for accounting.
Depreciation of intangible assets: methods of accrual
There are three methods for calculating the depreciation of intangible assets: the linear method, the method of decreasing balance and the method of writing off the value in proportion to the volume of production.
The organization independently determines the most suitable method of accrual for itself.
Recall that the straight-line method assumes straight-line depreciation over the entire useful life. That is, every month the same amount is written off to the costs of selling account 44 (for trade organizations) or to the cost of production of account 20 (for manufacturing enterprises).
This amount is determined at the beginning of the use of the asset by dividing the original cost by the total period of use. The resulting value will be the monthly depreciation deduction.
The diminishing balance method is that depreciation is calculated based on the residual value of the asset and the useful life.
Monthly, when calculating, the residual value of intangible assets at the beginning of the month is taken and multiplied by a coefficient that cannot be more than 3 (the organization sets it for itself), then the resulting value is divided by the useful life in months. The resulting depreciation amount is expensed. Thus, every month the depreciation deductions will be less and less and by the end of the intangible assets use period will be reduced to zero.
The last method of writing off the cost in proportion to the volume of production assumes the dependence of depreciation on the ratio of the volume of production that is planned to be produced for the entire service life, and actually produced in a month.
With this method, monthly deductions are determined as follows: the volume of products (work) produced per month (in rubles) is multiplied by the actual cost of intangible assets and divided by the estimated volume of production for the entire period of use (in rubles).
The choice of the method for calculating the depreciation of intangible assets must be done by analyzing the economic feasibility of each method.
The linear method is convenient in that every month we write off the same amount, you do not need to constantly calculate it.
The second method is convenient if you need to write off the value of an asset as soon as possible and return the money for their further investment, for example, to purchase a new intangible asset or to improve an existing one.
The chosen method must be reflected in the accounting policy of the enterprise, read about the accounting policy.
Depreciation of Intangible Assets: Transactions
It is convenient to use a specially created account 05 "Depreciation of intangible assets" to account for deductions. On the credit of this account, amortization is accumulated and written off to the debit of accounts 20 or 44.
Postings:
D20 (23, 25, 26) K05 - depreciation on intangible assets for a manufacturing enterprise was charged.
D44 K05 - for a trade enterprise.
When the object of an intangible asset is retired (written off), the amortization accumulated for the entire period of use is debited from the debit of account 05 to the credit of account 04, after which the residual value of the object is determined, according to which it will be written off. It is possible to write off the cost of an object directly from the accounting account of this object by posting K04 D 20 (44).
Video lesson "Accounting for amortization of intangible assets: examples, transactions"
In the video lesson, the expert of the site "Accounting for Dummies", Chief Accountant Natalya Vasilievna Gandeva explains in detail about accounting and the features of accounting for amortization of intangible assets in an organization, shows transactions and practical examples ⇓
You can download the slides for the video tutorial at the link below.