VIGNESH SC BOSE (Business Advisor (Legal & Compliance)) (302 Points)
23 April 2021Dear Friends,
Method of accounting of Software Code under development, and the code already developed, by a software company, while merging the firms and in the running company. Whether we have to treat it as a fixed asset or inventory.
CA. Sourav Sarkar
(Chartered Accountant )
(24583 Points)
Replied 23 April 2021
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 23 April 2021
Research costs are expensed and development costs are capitalised
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 23 April 2021
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 23 April 2021
Intangible assets don’t arise out of inventory. If you have capitalised a development cost in one company and merged it with other company, it will be recognised as intangible asset still in parent consolidated and subsidiary.
As you spend money, some are expensed and some are capitalised. They are like
a) costs of materials and services used or consumed in generating the intangible asset;
(b) costs of employee benefits (as defined in Ind AS 19) arising from the generation of the intangible asset;
(c) fees to register a legal right; and
(d) amortisation of patents and licences that are used to generate the intangible asset.
All of the above form intangible assets. I think, in AS’s standard, it is included in gross fixed asset block. As per IndAS, it is under current & non current assets as per its useful life.
CAclubindia
