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Dear sir,
Please answer -
A company has developed a seed of potato spending Rs 1 crore on it...now this seed is not intended to be sale and will be used to develop other more seed
Now company is recording it as fixed asset stating that it is in physical form, not intended to be sale and used to develop other seeds.
I think it should be recorded as intangible assets because it is seeds scientific composition which is being developed.
And also will be the case for developing some medicine...it will be also in physical form but should be recorded as intangible.
Please suggest
plz prove with reference to A S that why it is recognised as intangible asset not with example.
Replies (5)
Hi Diwas,
It's a good and conceptual question for which I would Like to appraciate you.
If we go by the definition of Intangible, please emphsise on the word Non-Monetary Assests, which means intangibles are neither money held nor assets to be recived in fixed or determinable amount.
But the seeds can be called as monetary assests as money can be recived from them if sold in market, unlike patents, copyrights, trademark.
sir plz conclude how we account this problem
ya how we should account it?
It shoul be categorised as fixed assests because seeds o potato have a ready for sale market which makes it a moneyary assets thus excluding it from the definition of Intangible.
As per definition of intangible assets., both �characteristics of being non monetary nd without physical substance has not been satisfied .it is recommend to record as a fixed assets.
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