Biological Assets comes under International Accounting Standard IAS 41 Agriculture. IAS 41 Agriculture is the first standard that specifically covers the primary sector. The scope of IAS 41 is accounting for agricultural activity. Agricultural Activity- It is the management of biological transformatRead more
Biological Assets comes under International Accounting Standard IAS 41 Agriculture.
IAS 41 Agriculture is the first standard that specifically covers the primary sector. The scope of IAS 41 is accounting for agricultural activity.
Agricultural Activity- It is the management of biological transformation by an entity and measuring the change in the quality and quantity of biological assets.
Biological Transformation- It comprises the process of growth, degeneration, production and procreation that cause qualitative or quantitative changes in a biological asset
Biological Asset – They are living plants or animals owned by an entity
Agricultural Produce- It is the harvested / detached product of the entity’s biological asset.
IAS 41 does not apply to
Agricultural land
Intangible assets related to agricultural activity
Products that are the result of processing after the point of harvest, for example, yarn, carpet, rubber, wine, etc
The land on which the biological assets grow, regenerate, degenerate.
Biological Assets
Definition
Biological assets are living plants or animals that go through biological transformation, owned by an entity to prepare agricultural produce for the purpose of agricultural activities only.
Living plants include plants that are consumable within 1 year and are harvested. It also includes plants that are used for lumbering and wood-cutting activities.
Farming: They are key to agriculture and food production.
Income: They generate substantial income for businesses in industries such as vineyards, livestock, silviculture, etc.
Sustainability: Properly managing them helps the environment.
Accounting & Presentation
Recognition
Under IAS 41 biological assets are recognised when
The business must have ownership over them from a past event.
The future economic benefits are expected to flow to the business from their ownership.
The cost or fair value of the asset can be measured reliably.
Agricultural produce is recognised
It is recognised at the point of harvest or detachment.
Agricultural produce is derecognised when
They enter the trading.
Enters the production process.
Measurement
Biological assets are measured on initial recognition and at each balance sheet date at their fair value less costs to sell.
Costs to sell are incremental costs incurred in selling the asset.
Agricultural produce is measured at the point of harvest, at fair value less costs to sell at the point of harvest.
Agricultural produce after the point of harvest/ detachment is transferred and treated under the IAS 2 Inventory
Gains & Losses
Gains and losses arising from the initial recognition of biological assets are reported in the statement of profit and loss.
The change in fair value less costs to sell of a biological asset between balance sheet dates is reported as gain or loss in the statement of profit and loss.
A gain or loss arising on initial recognition of agricultural produce at fair value less selling costs is included in profit or loss for the period in which it arises.
Treatment
The sale of agricultural produce is treated as revenue in the statement of profit and loss.
Agricultural produce to be harvested for more than 12 months, livestock to be held for more than 12 months and trees cultivated for lumber are recorded as Biological assets under the Non-current assets head in the balance sheet.
Agricultural produce to be harvested within 12 months, livestock to be slaughtered within 12 months and annual crops like wheat, and maize are recorded as Biological assets under the head Current assets in the balance sheet.
Inventories produced from agricultural produce are presented as Inventory under the head Current assets in the balance sheet.
To understand the accounting treatment of fixed assets under IFRS let us first understand what fixed assets are. What are Fixed Assets? Fixed assets are the assets that are purchased for long-term use by a business and not for resale. Some examples of fixed assets are land, buildings, machinery, furRead more
To understand the accounting treatment of fixed assets under IFRS let us first understand what fixed assets are.
What are Fixed Assets?
Fixed assets are the assets that are purchased for long-term use by a business and not for resale. Some examples of fixed assets are land, buildings, machinery, furniture and fixtures, etc.
Fixed assets are essential for the smooth operations of the business. It often shows the value of the business. The value of fixed assets usually decreases with time, obsolescence, damage, etc.
As per IAS-16 Property, Plant and Equipment, an asset is identified as a fixed asset if it satisfies the following conditions:
the future economic benefits associated with the asset will probably flow to the entity, and
the cost of the asset can be measured reliably.
What is IFRS?
IFRS stands for International Financial Reporting Standards. It provides a set of standards to be followed globally by all companies to ensure transparency, comparability, and consistency.
What is the accounting treatment of fixed assets under IFRS?
Under IFRS, the first step is to measure the value of the fixed assets on cost. The cost of the fixed assets includes the following:
purchase price
any direct cost related to the asset (such as transportation, installation, etc.)
duties/taxes
After this step, the entity may choose any one of the following two primary methods:
Cost Model: According to this model the value is first recognized on a cost basis. This includes the purchase price and direct costs attributable to the asset. Subsequently, depreciation is calculated on the cost of the asset. Depreciation spreads the cost of an asset over its useful life. Impairment checks are conducted to ensure the asset’s value on the books doesn’t exceed what it’s worth.
For example, a company bought a piece of machinery for 60,000. 5,000 were spent on its installation. It has a useful life of 10 years. The machinery would be depreciated over its useful life of 10 years based on its cost which is 65,000.
2. Revaluation model: As per this model, the fixed assets are valued on their fair value, as on the revaluation date. The amount of depreciation and impairment losses is subtracted from the fair value.
If the value of an asset increases, the gain goes to equity (revaluation surplus) unless it can be set off with a past loss recorded in profit or loss.
On the other hand, if the value decreases, the loss goes to profit or loss unless it offsets a past surplus in equity.
For example, a building was purchased for 100,000. On the revaluation date, the fair value of this building was 150,000. Hence, there is a revaluation surplus of 50,000 which shall be credited to the revaluation surplus account.
Impact on Financial Statements
Fixed assets are shown on the Assets side of the Balance Sheet.
Conclusion
From the above discussion, it may be concluded that:
Fixed assets are the assets that are purchased for long-term use by a business and not for resale.
Some examples of fixed assets are land, buildings, machinery, furniture and fixtures, etc.
IFRS provides a set of standards to be followed globally by all companies to ensure transparency, comparability, and consistency.
Under IFRS, the first step is to measure the value of the fixed assets on cost.
After this step, the entity may choose any one of the two primary methods which are cost model and the revaluation model.
Fixed assets are shown on the Assets side of the Balance Sheet.
Deferred Tax Liability A deferred tax liability represents an obligation to pay taxes in the future. These taxes are owed by a company but are not due to be paid until a future date. Companies that incur such an obligation prepare and maintain two financial reports every year: a tax statement and anRead more
Deferred Tax Liability
A deferred tax liability represents an obligation to pay taxes in the future. These taxes are owed by a company but are not due to be paid until a future date.
Companies that incur such an obligation prepare and maintain two financial reports every year: a tax statement and an income statement.
This is because companies maintain their books as per book accounting rules (GAAP/IFRS), but they have to pay taxes according to tax accounting rules, and they each have to follow their own guidelines.
For example, a tax statement follows the cash basis of accounting, and an income statement follows the accrual basis of accounting.
Companies calculate their profit as per the accounting rules as well as tax laws known as accounting income and taxable income, respectively. Some differences arise due to the application of different provisions of law.
These temporary differences are accounted for, recognized, and carried forward in the books of accounts and create deferred tax.
Example
Here is an example of deferred tax liability.
In the given example, tax as per income statement is 70,000, whereas as per tax statement it is 56,000. This temporary difference is termed as deferred tax liability of 14,000.
When accounting income is more than taxable income, it creates Deferred Tax Liability. It will be adjusted in the books of accounts during one or more subsequent year(s).
How Does it Arise?
There are several instances under which a company creates a deferred tax liability. Some other instances are:
Depreciation Methods
One of the most common reasons for deferred tax liability is when a company uses different depreciation methods in the Income and Tax Statement.
Assets are depreciated by calculating the straight-line method in the Income Statement, while the written-down value method is used in the Tax Statement.
Since the straight-line value method produces lower depreciation when compared to the WDV method, accounting income is temporarily higher than taxable income.
The company recognises deferred tax liability as this difference between accounting income and taxable income.
Treatment of Revenue & Expenses
Deferred tax liability can also arise when there is a difference in the way revenue and expenses are treated in books of accounts.
As mentioned earlier, accounting rules follow the accrual basis of accounting while tax laws follow the cash basis of accounting.
Meaning in the tax statement, income and expenses are recorded when they are received or paid, not when they are incurred or realised.
This difference in the treatment of revenue and expenses creates deferred tax liability.
Impact on Financial Statements
Recognising deferred tax liability and its subsequent effect on the company’s financial statement is important as it simplifies the process of auditing and analysing financial reports.
Balance Sheet
Deferred tax liabilities are recorded on the liability side of the balance sheet under non-current liabilities.
Cash Flow Statement
The deferred tax liability is added back to the net income in calculating cash flow from operating activities to show the actual cash flow.
To understand why we do not record self-generated goodwill in accounting, let us first understand what goodwill is and its accounting treatment. What is Goodwill? Goodwill is an intangible asset of a business. It represents the reputation and brand value of a business built over time. It is a valueRead more
To understand why we do not record self-generated goodwill in accounting, let us first understand what goodwill is and its accounting treatment.
What is Goodwill?
Goodwill is an intangible asset of a business. It represents the reputation and brand value of a business built over time. It is a value over and above the tangible assets of the business.
Goodwill often arises when a business purchases another business and pays a premium, which means a price higher than the fair value of the business.
Characteristics of Goodwill
Goodwill has the following characteristics:
It is an Intangible asset, meaning it has no physical existence and cannot be seen or touched.
It is generally recognized during transactions in mergers and acquisitions.
It is the value attributed to the brand value and reputation of the business.
It adds value to a business beyond its tangible assets.
Example of Goodwill
Let us take an example to understand the concept of goodwill better.
Suppose there is a company ABC Ltd. It is planning to acquire XYZ Ltd. The fair value of the assets of XYZ is calculated to be 600,000. However, ABC has agreed to pay a sum of 650,000 to acquire the company. This difference of 50,000 is goodwill.
Impact on Financial Statements
Goodwill is shown under the assets side of the Balance Sheet.
What is self-generated goodwill?
Self-generated goodwill in simple words means the positive reputation or trust that a business earns over time through their own hard work and decisions. It’s not something bought or inherited but something built from scratch internally, like a brand’s reputation, loyal customers, strong relationships, or unique ideas.
For example, a small business that goes the extra mile to offer great customer service or always delivers high-quality products over the years will naturally build goodwill.
It is also known as internally generated goodwill.
Why do we not record sef-generated goodwill?
Self-generated goodwill is not recorded in the financial statements because of the following reasons:
Measurement may not be reliable: The measurement of self-generated goodwill is majorly based on the judgment of the managers. It is based on the value creation because of a good reputation or consumer base of the business, which might not be measured accurately.
Conservatism principle: As per the conservatism principle, a business shall not overstate its assets or liabilities. However, self-generated goodwill might be overstated.
Lack of market transaction: There is a lack of a market transaction that ensures verification of the value of goodwill as in the case of purchased goodwill.
Manipulation: There are higher chances of manipulation of financial statements through self-generated goodwill.
Conclusion
On a concluding note, self-generated goodwill is something that adds real value to a business, but it’s not something that can easily be measured or captured in financial statements. Accounting is all about providing clear, reliable information, and including goodwill would make things murky and open to manipulation. Even though it doesn’t show up on the books, you can still see its effects in a company’s reputation and success. Maybe in the future, businesses will find a way to highlight it better, but for now, leaving it out helps keep financial reports honest and straightforward.
Brands can be considered as an Intangible asset as they are a long-term investment done by the company and it gives benefit to an entity in future periods. Like any other intangible asset, brands require long-term investment and will pay over time. Like any other asset, these brands can be bought anRead more
Brands can be considered as an Intangible asset as they are a long-term investment done by the company and it gives benefit to an entity in future periods.
Like any other intangible asset, brands require long-term investment and will pay over time. Like any other asset, these brands can be bought and sold. Brands are best used when they serve the vision and mission of the company.
So, we can definitely consider an organization brand as an intangible as it is expected to increase sales volume in the future period.
Further, we can understand both terms to get a deep understanding-
BRAND
Brand means a product, or service which has a unique identification and can be distinct from other products in the market. Branding is a process by which expenditure is incurred by an entity to create awareness towards the product in the customer’s eyes.
For example- Maggie, Coca-Cola, BMW
Brands can be created through these elements-
Design
Packaging
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INTANGIBLE ASSETS
Intangible asset are assets that can’t be seen or touched but the benefit of it occur in future periods for the entity. Even though intangible assets have no physical form but their benefits will accrue in future years. Businesses commonly hold intangible assets. Intangible assets can be further bifurcated in
Definite– Intangible assets that stay and give benefit for a limited or specific period of time covered under this
For example- An agreement is entered with an entity to patent a product for 5 years so this will stay for a definite period only
Indefinite– Intangible assets that stay and give benefit for an unlimited period of time covered under this
For example- A brand which is made by an entity will stay for an indefinite period
Intangible assets can be in various forms these are the following –
Trademark– A trademark is a sign, design, and expression that distinguish the company’s product or services from other company. Trademark is considered an Intellectual Property Right.
Goodwill– Goodwill refers to the value of the company that the company gets from its brand, customer base, and brand Reputation associated with its intellectual property.
Patents– A patent refers to a right reserved for a product exclusively by a person or entity. Under this the right of such making of the product gets reserved by the company and other person or entity can’t make this product.
Copyright– Copyright refers to an intellectual property right that protects the work of the original owner from being copied by some other person.
Brand– Brand means a product, or service that has a unique identification and can be distinct from other products in market
So, we can definitely consider that brand is a subpart of an intangible asset and can be considered as an intangible asset as it also can’t be touched or seen. Still, its benefit will accrue till future time. These both help an entity to grow its business till the future
Accrual Accrual expense means the transaction that takes place in a particular period must be accounted for in that period only irrespective of the fact when such amount has been paid. An accrual of the expenditure which is not paid will be listed in the books of accounts. These accruals can be furtRead more
Accrual
Accrual expense means the transaction that takes place in a particular period must be accounted for in that period only irrespective of the fact when such amount has been paid.
An accrual of the expenditure which is not paid will be listed in the books of accounts. These accruals can be further divided into two parts
Accrual Expense-
Accrual Expense means any transaction that takes place in a particular period but the amount for it will be paid on a later period.
For example- If rent of 10,000 for the month of March was paid in April month then this rent will be accounted for in the books in March
For example- Interest of 1,000 for the month of March of the loan amount of 10,000 paid in April then will be accounted for in the books in March
These are the following accrued expense
Accrual Rent– Accrual rent means the amount for using the land of the landlord is paid at a later period than the period when it is put into use.
Accrual Insurance– Accrual insurance means the amount paid as a premium to the insurance company paid on a later period than the period when it is due
Accrual Expense- Acrrual expense means the amount for any expense paid on a later period than the period when it pertains to be paid
Accrual Wages- Accrual wages means the amount which is paid to employees on a later period than the period when the wages get due
Accrual Loan Interest– Loan Interest means the amount of interest on a loan which is paid on a later period than the period when it is due on
Accrual Revenue-
Accrual Revenue means any transaction that takes place in a particular period but the amount for it will be received in the later period.
For example- If interest of 10,000 on bonds for the period of March is received in April months then this amount will be accounted for in March. These are the following accrued revenue
For example- Rent of 10,000 for the month of March received in April month then this rent will be accounted for in the books in March
Accrual Income- Acrrual expense means the amount for any income received on a later period than the period when it pertains to be received
Accrual Rent– Accrual rent means the amount for using the land of the entity by the other party is received at a later period than the period when it is put into use.
Accrued Interest– Accrued interest means the amount of interest received on a later period than the period when it pertains to receive
What are biological assets? What is their accounting treatment?
Biological Assets comes under International Accounting Standard IAS 41 Agriculture. IAS 41 Agriculture is the first standard that specifically covers the primary sector. The scope of IAS 41 is accounting for agricultural activity. Agricultural Activity- It is the management of biological transformatRead more
Biological Assets comes under International Accounting Standard IAS 41 Agriculture.
IAS 41 Agriculture is the first standard that specifically covers the primary sector. The scope of IAS 41 is accounting for agricultural activity.
IAS 41 does not apply to
Biological Assets
Definition
Biological assets are living plants or animals that go through biological transformation, owned by an entity to prepare agricultural produce for the purpose of agricultural activities only.
Living plants include plants that are consumable within 1 year and are harvested. It also includes plants that are used for lumbering and wood-cutting activities.
Examples
Examples of biological assets are:
Sheep, pigs, poultry, beef cattle, fish, dairy cows, plants for harvest etc
Importance
Accounting & Presentation
Recognition
Under IAS 41 biological assets are recognised when
Agricultural produce is recognised
Agricultural produce is derecognised when
Measurement
Gains & Losses
Treatment
- The sale of agricultural produce is treated as revenue in the statement of profit and loss.
- Agricultural produce to be harvested for more than 12 months, livestock to be held for more than 12 months and trees cultivated for lumber are recorded as Biological assets under the Non-current assets head in the balance sheet.
- Agricultural produce to be harvested within 12 months, livestock to be slaughtered within 12 months and annual crops like wheat, and maize are recorded as Biological assets under the head Current assets in the balance sheet.
- Inventories produced from agricultural produce are presented as Inventory under the head Current assets in the balance sheet.
See lessWhat are the different methods of accounting for fixed assets according to IFRS?
To understand the accounting treatment of fixed assets under IFRS let us first understand what fixed assets are. What are Fixed Assets? Fixed assets are the assets that are purchased for long-term use by a business and not for resale. Some examples of fixed assets are land, buildings, machinery, furRead more
To understand the accounting treatment of fixed assets under IFRS let us first understand what fixed assets are.
What are Fixed Assets?
Fixed assets are the assets that are purchased for long-term use by a business and not for resale. Some examples of fixed assets are land, buildings, machinery, furniture and fixtures, etc.
Fixed assets are essential for the smooth operations of the business. It often shows the value of the business. The value of fixed assets usually decreases with time, obsolescence, damage, etc.
As per IAS-16 Property, Plant and Equipment, an asset is identified as a fixed asset if it satisfies the following conditions:
What is IFRS?
IFRS stands for International Financial Reporting Standards. It provides a set of standards to be followed globally by all companies to ensure transparency, comparability, and consistency.
What is the accounting treatment of fixed assets under IFRS?
Under IFRS, the first step is to measure the value of the fixed assets on cost. The cost of the fixed assets includes the following:
After this step, the entity may choose any one of the following two primary methods:
For example, a company bought a piece of machinery for 60,000. 5,000 were spent on its installation. It has a useful life of 10 years. The machinery would be depreciated over its useful life of 10 years based on its cost which is 65,000.
2. Revaluation model: As per this model, the fixed assets are valued on their fair value, as on the revaluation date. The amount of depreciation and impairment losses is subtracted from the fair value.
If the value of an asset increases, the gain goes to equity (revaluation surplus) unless it can be set off with a past loss recorded in profit or loss.
On the other hand, if the value decreases, the loss goes to profit or loss unless it offsets a past surplus in equity.
For example, a building was purchased for 100,000. On the revaluation date, the fair value of this building was 150,000. Hence, there is a revaluation surplus of 50,000 which shall be credited to the revaluation surplus account.
Impact on Financial Statements
Fixed assets are shown on the Assets side of the Balance Sheet.
Conclusion
From the above discussion, it may be concluded that:
See lessWhat is a deferred tax liability?
Deferred Tax Liability A deferred tax liability represents an obligation to pay taxes in the future. These taxes are owed by a company but are not due to be paid until a future date. Companies that incur such an obligation prepare and maintain two financial reports every year: a tax statement and anRead more
Deferred Tax Liability
A deferred tax liability represents an obligation to pay taxes in the future. These taxes are owed by a company but are not due to be paid until a future date.
Companies that incur such an obligation prepare and maintain two financial reports every year: a tax statement and an income statement.
This is because companies maintain their books as per book accounting rules (GAAP/IFRS), but they have to pay taxes according to tax accounting rules, and they each have to follow their own guidelines.
For example, a tax statement follows the cash basis of accounting, and an income statement follows the accrual basis of accounting.
Companies calculate their profit as per the accounting rules as well as tax laws known as accounting income and taxable income, respectively. Some differences arise due to the application of different provisions of law.
These temporary differences are accounted for, recognized, and carried forward in the books of accounts and create deferred tax.
Example
Here is an example of deferred tax liability.
In the given example, tax as per income statement is 70,000, whereas as per tax statement it is 56,000. This temporary difference is termed as deferred tax liability of 14,000.
When accounting income is more than taxable income, it creates Deferred Tax Liability. It will be adjusted in the books of accounts during one or more subsequent year(s).
How Does it Arise?
There are several instances under which a company creates a deferred tax liability. Some other instances are:
Depreciation Methods
Treatment of Revenue & Expenses
Impact on Financial Statements
Recognising deferred tax liability and its subsequent effect on the company’s financial statement is important as it simplifies the process of auditing and analysing financial reports.
Balance Sheet
Cash Flow Statement
- The deferred tax liability is added back to the net income in calculating cash flow from operating activities to show the actual cash flow.
See lessWhy don’t we record self-generated goodwill in accounting?
To understand why we do not record self-generated goodwill in accounting, let us first understand what goodwill is and its accounting treatment. What is Goodwill? Goodwill is an intangible asset of a business. It represents the reputation and brand value of a business built over time. It is a valueRead more
To understand why we do not record self-generated goodwill in accounting, let us first understand what goodwill is and its accounting treatment.
What is Goodwill?
Goodwill is an intangible asset of a business. It represents the reputation and brand value of a business built over time. It is a value over and above the tangible assets of the business.
Goodwill often arises when a business purchases another business and pays a premium, which means a price higher than the fair value of the business.
Characteristics of Goodwill
Goodwill has the following characteristics:
Example of Goodwill
Let us take an example to understand the concept of goodwill better.
Suppose there is a company ABC Ltd. It is planning to acquire XYZ Ltd. The fair value of the assets of XYZ is calculated to be 600,000. However, ABC has agreed to pay a sum of 650,000 to acquire the company. This difference of 50,000 is goodwill.
Impact on Financial Statements
Goodwill is shown under the assets side of the Balance Sheet.
What is self-generated goodwill?
Self-generated goodwill in simple words means the positive reputation or trust that a business earns over time through their own hard work and decisions. It’s not something bought or inherited but something built from scratch internally, like a brand’s reputation, loyal customers, strong relationships, or unique ideas.
For example, a small business that goes the extra mile to offer great customer service or always delivers high-quality products over the years will naturally build goodwill.
It is also known as internally generated goodwill.
Why do we not record sef-generated goodwill?
Self-generated goodwill is not recorded in the financial statements because of the following reasons:
Conclusion
On a concluding note, self-generated goodwill is something that adds real value to a business, but it’s not something that can easily be measured or captured in financial statements. Accounting is all about providing clear, reliable information, and including goodwill would make things murky and open to manipulation. Even though it doesn’t show up on the books, you can still see its effects in a company’s reputation and success. Maybe in the future, businesses will find a way to highlight it better, but for now, leaving it out helps keep financial reports honest and straightforward.
See lessAre brands intangible assets?
Brands can be considered as an Intangible asset as they are a long-term investment done by the company and it gives benefit to an entity in future periods. Like any other intangible asset, brands require long-term investment and will pay over time. Like any other asset, these brands can be bought anRead more
Brands can be considered as an Intangible asset as they are a long-term investment done by the company and it gives benefit to an entity in future periods.
Like any other intangible asset, brands require long-term investment and will pay over time. Like any other asset, these brands can be bought and sold. Brands are best used when they serve the vision and mission of the company.
So, we can definitely consider an organization brand as an intangible as it is expected to increase sales volume in the future period.
Further, we can understand both terms to get a deep understanding-
BRAND
Brand means a product, or service which has a unique identification and can be distinct from other products in the market. Branding is a process by which expenditure is incurred by an entity to create awareness towards the product in the customer’s eyes.
For example- Maggie, Coca-Cola, BMW
Brands can be created through these elements-
INTANGIBLE ASSETS
Intangible asset are assets that can’t be seen or touched but the benefit of it occur in future periods for the entity. Even though intangible assets have no physical form but their benefits will accrue in future years. Businesses commonly hold intangible assets. Intangible assets can be further bifurcated in
Definite– Intangible assets that stay and give benefit for a limited or specific period of time covered under this
For example- An agreement is entered with an entity to patent a product for 5 years so this will stay for a definite period only
Indefinite– Intangible assets that stay and give benefit for an unlimited period of time covered under this
For example- A brand which is made by an entity will stay for an indefinite period
Intangible assets can be in various forms these are the following –
Trademark– A trademark is a sign, design, and expression that distinguish the company’s product or services from other company. Trademark is considered an Intellectual Property Right.
Goodwill– Goodwill refers to the value of the company that the company gets from its brand, customer base, and brand Reputation associated with its intellectual property.
Patents– A patent refers to a right reserved for a product exclusively by a person or entity. Under this the right of such making of the product gets reserved by the company and other person or entity can’t make this product.
Copyright– Copyright refers to an intellectual property right that protects the work of the original owner from being copied by some other person.
Brand– Brand means a product, or service that has a unique identification and can be distinct from other products in market
So, we can definitely consider that brand is a subpart of an intangible asset and can be considered as an intangible asset as it also can’t be touched or seen. Still, its benefit will accrue till future time. These both help an entity to grow its business till the future
See lessWhat are some examples of deferred revenue expenses?
Fixed
Fixed
See lessWhat is the best example of accrual accounting?
Accrual Accrual expense means the transaction that takes place in a particular period must be accounted for in that period only irrespective of the fact when such amount has been paid. An accrual of the expenditure which is not paid will be listed in the books of accounts. These accruals can be furtRead more
Accrual
Accrual expense means the transaction that takes place in a particular period must be accounted for in that period only irrespective of the fact when such amount has been paid.
An accrual of the expenditure which is not paid will be listed in the books of accounts. These accruals can be further divided into two parts
Accrual Expense-
Accrual Expense means any transaction that takes place in a particular period but the amount for it will be paid on a later period.
For example- If rent of 10,000 for the month of March was paid in April month then this rent will be accounted for in the books in March
For example- Interest of 1,000 for the month of March of the loan amount of 10,000 paid in April then will be accounted for in the books in March
These are the following accrued expense
Accrual Revenue-
Accrual Revenue means any transaction that takes place in a particular period but the amount for it will be received in the later period.
For example- If interest of 10,000 on bonds for the period of March is received in April months then this amount will be accounted for in March. These are the following accrued revenue
For example- Rent of 10,000 for the month of March received in April month then this rent will be accounted for in the books in March
- Accrual Income- Acrrual expense means the amount for any income received on a later period than the period when it pertains to be received
- Accrual Rent– Accrual rent means the amount for using the land of the entity by the other party is received at a later period than the period when it is put into use.
- Accrued Interest– Accrued interest means the amount of interest received on a later period than the period when it pertains to receive
See less