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Intangible Assets - software

Susmita Sahoo (33 Points)

12 June 2021

For depreciation purpose, is scrap value considered in software ?

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11 Replies

Muhammed Ibrahim Badusha (64 Points)
Replied 12 June 2021

Is there scrap value for your software?

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jignesh (BUSINESS) (67 Points)
Replied 12 June 2021

If software validity is upto one year then whole purchase value consider as an expense.

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 12 June 2021

It is called as residual value in this standard.

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 13 June 2021

No scrap value cannot be considered

Prachi Bansal (3129 Points)
Replied 13 June 2021

What will be the depreciation applicable in such a case?

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yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 13 June 2021

Use the it act depreciation for tax purposes. For company purposes, use the dep formula.

tax adda, tax guru, clear tax

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 13 June 2021

75. The residual value of an intangible asset should be assumed to be zero unless:
(a) there is a commitment by a third party to purchase the asset at the end of its useful life; or
(b) there is an active market for the asset and:
(i) residual value can be determined by reference to that
market; and
(ii) it is probable that such a market will exist at the end of the asset's useful life.
76. A residual value other than zero implies that an enterprise expects to dispose of the intangible asset before the end of its economic life.

Prachi Bansal (3129 Points)
Replied 13 June 2021

Thanks for the valuable information

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 31 July 2021

Your welcome

Nidhi (Chief Accountant) (3150 Points)
Replied 31 July 2021

What is a scrap value of software ?

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yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 31 July 2021

75. The residual value of an intangible asset should be assumed to be zero unless: (a) there is a commitment by a third party to purchase the asset at the end of its useful life; or (b) there is an active market for the asset and: (i) residual value can be determined by reference to that market; and (ii) it is probable that such a market will exist at the end of the asset's useful life. 76. A residual value other than zero implies that an enterprise expects to dispose of the intangible asset before the end of its economic life.