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Only to amortize intangible assets which are recognised as finite useful life. There are tow models, one is cost model, another is revaluation model. The way to charge intangible assets' amortisation is same as charging depreciation on physical non current assets. Carrying amount (net book value) is equal cost or re-valuated amount less any subsequent accumulated amortisation and any impairment losses. However, Revaluations should be regularly made so the carrying amount does not differ from the recoverable amount (it is the higher amount of net realisable value or value in use) at the end of the reporting period. On the other hand, If the intangible assets are recognised as definite useful life, there is no need to charge amortisation on the profit and loss. But annually impairment test should be carried out. A impairment loss or a revaluation surplus will be adjusted on both income statement and balance sheet. Hope it is helpful!
Following are the intangible assets amortized: 1 - Patents 2 - Goodwill 3 - Preliminary Expenses etc.
Amortization usually refers to spreading an intangible asset's cost over that asset's useful life. Depreciation, on the other hand, refers to prorating a tangible asset's cost over that asset's life.Depreciation Is Applicable only on Fixed & Tangible Assets Which Depends on useful life of that assets that may be expected accurately but Amortization applicable on Intangible Assets whose life is very critical to be measured.DEPRECIATION is calculated for tangible assets while AMORTIZATION is calculated for intangible assets.
The literature makes a distinction between intangible assets with determinate useful lives (e.g., a patent) and those with indeterminate useful lives (e.g., goodwill or (sometimes) part of research and development).Some intangible economic assets do exist, but are not recognized by accountants at all because they cannot be measured, and a future benefit flowing from them is not reasonably certain. For example, the combined talent of the company's employees is such an asset. However, the benefit that results from that talent cannot be measured, and future benefits cannot be reasonably expected because these employees are free to quit at any time.Some intangible assets don't have legal lives, or even determinable useful lives.For example, there are differing opinions regarding the amortization of purchased goodwill (the difference between the price paid for a purchased business and the total fair market value of the business' net assets. Some countries' accounting rules do not permit the amortization of purchased goodwill: some do, but there is no such thing as the legal life of purchased goodwill, so if it is amortized, it is amortized ober an arbitrary number of years.Where an intangible asset has a determinable legaluseful life (for example, a patent), it is amortized over its legal life.
Plant assets only have a limited usage and in order to calculate the life of an asset, you must depreciate the asset according to it's useful life minus salvage value.
Only to amortize intangible assets which are recognised as finite useful life. There are tow models, one is cost model, another is revaluation model. The way to charge intangible assets' amortisation is same as charging depreciation on physical non current assets. Carrying amount (net book value) is equal cost or re-valuated amount less any subsequent accumulated amortisation and any impairment losses. However, Revaluations should be regularly made so the carrying amount does not differ from the recoverable amount (it is the higher amount of net realisable value or value in use) at the end of the reporting period. On the other hand, If the intangible assets are recognised as definite useful life, there is no need to charge amortisation on the profit and loss. But annually impairment test should be carried out. A impairment loss or a revaluation surplus will be adjusted on both income statement and balance sheet. Hope it is helpful!
Following are the intangible assets amortized: 1 - Patents 2 - Goodwill 3 - Preliminary Expenses etc.
Amortization usually refers to spreading an intangible asset's cost over that asset's useful life. Depreciation, on the other hand, refers to prorating a tangible asset's cost over that asset's life.Depreciation Is Applicable only on Fixed & Tangible Assets Which Depends on useful life of that assets that may be expected accurately but Amortization applicable on Intangible Assets whose life is very critical to be measured.DEPRECIATION is calculated for tangible assets while AMORTIZATION is calculated for intangible assets.
You can amortze a prepetual sw lisc over its useful life.
The literature makes a distinction between intangible assets with determinate useful lives (e.g., a patent) and those with indeterminate useful lives (e.g., goodwill or (sometimes) part of research and development).Some intangible economic assets do exist, but are not recognized by accountants at all because they cannot be measured, and a future benefit flowing from them is not reasonably certain. For example, the combined talent of the company's employees is such an asset. However, the benefit that results from that talent cannot be measured, and future benefits cannot be reasonably expected because these employees are free to quit at any time.Some intangible assets don't have legal lives, or even determinable useful lives.For example, there are differing opinions regarding the amortization of purchased goodwill (the difference between the price paid for a purchased business and the total fair market value of the business' net assets. Some countries' accounting rules do not permit the amortization of purchased goodwill: some do, but there is no such thing as the legal life of purchased goodwill, so if it is amortized, it is amortized ober an arbitrary number of years.Where an intangible asset has a determinable legaluseful life (for example, a patent), it is amortized over its legal life.
Plant assets only have a limited usage and in order to calculate the life of an asset, you must depreciate the asset according to it's useful life minus salvage value.
maturity of fixed assets means the completion of useful life of fixed assets.
According to useful life of an asset.
Debt to total assets ratio
Yes, golf membership has an indefinite useful life and fulfils the criteria of an intangible asset. This assumption is further confirmed if the golf membership used is not for the purpose of investment and is solely for utilisation of the services.
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A Limited Company is a common term used to refer to a corporation, whether public or private. Fixed assets, which are usually Capital Assets (Property, Plant and Equipment) and are recorded at historical cost less any depreciation. Fair market vale (FMV) is only used when a corporation decides to discontinue a portion of its operations and the assets are classified held-for-sale. Historical cost is what's reported on the face of the financial statements but if FMV would be more useful to the users of the statements it can always be disclosed in the notes.