Depreciation of Intangible assets

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Querist : Anonymous

Querist : Anonymous (Querist)

10 February 2010 Can any body suggest me what are the rates of depreciation for the following items:

1. Customer relation ships
2. Technology
3. IPR& D (In process R&D)
4. Non-Compete
5. Good will..

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)

11 February 2010 Depreciaton rate is 25% in case of Income Tax on All Intangible assets.

However, i have doubt that following assets to be treated as Intangible assets, i think these should be treated as revenue exp.:

1) Customer Relationships
2) Non-Compete
3) Research portion in R&D exp.

Regards!!!

Querist : Anonymous

Querist : Anonymous (Querist)

11 February 2010 Thanks for the reply.. Can you just let me know abt IPR&D.. In process research & Development..

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)

12 February 2010 According to AS-26(Intangible Assets), it is given that :

Research portion should be treated as Indirect Expenses in P&L account.

However, Development portion should be capitalize in value of that asset for which development process is carrying on.

Therefore, if research portion is debiting in P&L so it should be revenue expenditure, whereas, if Development portion is capitalizing then depreciation to be claim on this.

Reagards!!!

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