Can anybody advice me how to account the intangible asset (know-how) in the book of accounts for a company. If know-how is treated as Fixed asset, what is the rate of depreciation under Companies Act and Income Tax Act.
The company is incorporated a year back. But they have not started the operations yet.
Fixed Asset and Intangible assets are ready for operations but not put to use yet as the operations are not started.
Can we claim depreciation a. from the year of starting operations by the company OR b. claim depreciation from the first year itself and capitalize the expense as pre-operative expenses to be written off in 5 years from the date of commencement of operations.
Please advice which would be a better procedure to follow.
CAclubindia
