As an important asset component of an enterprise, the reasonable calculation and amortization of the value consumption of intangible assets has become a key part of the preparation of financial statements. The determination of the amortization period of intangible assets is related to the true reflection of the financial status of the enterprise, and affects the tax burden and investment decision of the enterprise. So, how to determine the amortization period of intangible assets?This article consults the opinions of professional institutions, and the answers are as follows:
First of all, according to the nature and characteristics of intangible assets, we can divide them into term-based intangible assets and non-term-type intangible assets. Term-based intangible assets mainly include patent rights, non-patented technologies, trademark rights, copyrights, land use rights, etc., which are characterized by a limited service life and gradual depletion of value. Intangible assets with an indefinite term mainly include goodwill, etc., which are characterized by an uncertain useful life and may gradually increase in value over a long period of time.
Secondly, the following principles should be followed when determining the amortization period of intangible assets:
1.Principle of objectivity: According to the actual situation and useful life of intangible assets, ensure that the determination of the amortization period is objective. For example, intangible assets that are clearly stipulated by law or agreed in the contract should be amortized according to the specified or agreed period.
2.The principle of maximizing benefits: on the premise of ensuring the authenticity of the financial statements, according to the actual situation of the enterprise and the needs of financial management, choose the amortization period that is conducive to the economic benefits of the enterprise. For example, for intangible assets with a long useful life, a shorter amortization period can be selected to reduce the tax burden of the enterprise and the cost of capital occupation.
3.Principle of dynamic adjustment: Adjust the amortization period in a timely manner according to the changes in the business environment of the enterprise and the intangible assets themselves. If a newly registered patent or contract is signed, the amortization period should be re-determined in a timely manner to truly reflect the content of the statement.
Thirdly, when determining the amortization period of intangible assets, the following methods can be referred to:
1.Straight-line method: The amortizable amount of intangible assets is evenly distributed in each accounting period. The calculation formula is: annual amortization of intangible assets = total amount of intangible assets acquired and useful life.
2.Production method: Amortization is calculated on the basis of the amount of production provided by the intangible asset over the life of the intangible asset. The calculation formula is: amortization per unit of production = amortization of assets without period in each period = amortization per unit of production Actual completed output in the period.
3.Accelerated amortization method: Enables the cost of intangible assets to be compensated at an accelerated rate over their estimated useful life. It mainly includes the declining balance method and the sum of years method.
In the current economic environment, the determination of the reasonable amortization period of intangible assets is of great significance for the financial health and sustainable development of enterprises. Enterprises should fully understand its importance and continuously improve the level of financial management to achieve the authenticity of financial statements and maximize economic benefits.
The above is all the answers to the question of how to determine the amortization period of intangible assets, if you have any other questions, you can leave a message in the comment area or consult the opinions of professional institutions [American enterprises].