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Trademark and copyright expenses treatment

Ashu jain (Practicing) (126 Points)

13 July 2020

How do we need to treat the expenses of trademark and copyright. Whether the same needs to be capitalised or booked as revenue expense ?

And if capitalised as intangible assets, what is the rate of depreciation for the same?

Thanks & Regards

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4 Replies

Eswar Reddy S (CFO- at NHTF) (58270 Points)
Replied 13 July 2020

You may treat them as goodwill .

Good will is not subjected to depreciation

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yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 13 July 2020

Hi, the amortisation method depends upon the pattern of consumption and it’s usually straight line method. Here, 25% is the allowable rate in the recognition year and wdv 25% in the subsequent years. You will capitalise them when there is an economic benefit and a reliable estimate available IndAS 38.21. It is initially measured at cost.

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 13 July 2020

Hi, @ Eswar Reddy S first part is also correct but only to the extent of writing off. Eg. if someone buys an intangible asset for 10,000₹ and it’s useful life is ten years, but purchased it in the middle of the year, then, the six months can be amortised and the other first six months can be expensed as scrap value is of no use when there is no intention to classify the asset as held for sale. Or else, this can be adjusted as half year by the end of its useful life instead of expensing it This is my assumption only.

krithisekar (law) (2 Points)
Replied 24 May 2022

Basic rights are available to the creator of the artwork for free. Unlike patents and trademarks, copyrights have only one identifiable cost: the small fees paid to the US Copyright Office to establish the rights. These fees are typically expensed in the current period if they are immaterial.