Intangible assets are another category of non-current assets that do not have a material form, since they are the end product of intellectual activity. Consider accounting entries for accounting for intangible assets upon receipt, depreciation and disposal.

Intangible assets: what are they and how to account for them?

The essence of the concept of "intangible assets" and the procedure for their accounting is regulated by Accounting Regulation No. 14. It is here that it is explained what can be attributed to intangible objects. Thus, NMA can be attributed to:

To account for intangible assets, an active account 04 is used, on which objects are reflected at their original cost.

As for the initial cost of intangible assets, it consists of the sum of the costs associated with their purchase, installation and configuration (payment of duties, information and consulting services). The initial cost is set at the time of acceptance of intangible assets for accounting and remains unchanged throughout the entire life of the object, except for cases of revaluation or depreciation of the asset. Note that only amounts excluding VAT are taken into account.

An interesting fact is that since 2008, transactions with intangible assets are exempt from VAT.

When registering an intangible asset, a transfer acceptance certificate is drawn up, which is the basis for opening an accounting card for intangible assets-1. The disposal of intangible assets can be formalized by an act of write-off in the form of OS-4 or an act of acceptance and transfer in the form of OS-1.

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List of possible entries that can be made when accounting for intangible assets

The disposal of intangible assets, as well as their receipt, which was discussed in detail, must be properly documented, the correct entries must be reflected in the accounting department. Below we will figure out how intangible assets can leave enterprises, and how to correctly arrange it.

Intangible assets are disposed of in the following cases:

1. If the moral or physical deterioration of the asset has come, in connection with which it becomes unsuitable for further use.
2. When transferring intangible assets to another enterprise for a fee, that is, a sale.
3. With the gratuitous transfer of an asset to another enterprise, that is, a donation.
4. Contribution to the authorized capital of another enterprise.

In fact, intangible assets can leave the enterprise in the same cases as fixed assets. Accounting for the disposal of fixed assets is considered in detail.

Disposal of intangible assets upon write-off

If an intangible asset is damaged, its useful life has expired, intangible assets have lost their functions and properties and are not suitable for further use for their intended purpose, then it must be written off the register.

A special commission assesses the condition of the asset, which makes a decision on the need to write off the object. At the same time, he draws up an order stating which particular intangible asset is to be written off and for what reason. The write-off process itself takes place on the basis of the write-off act. When an object is deregistered, a note about this is made in the accounting card for intangible assets of NMA-1.

When intangible assets are disposed of, the residual value must be written off as expenses of the enterprise. The residual value is determined as the difference between the original cost and the depreciation accrued on the write-off date.

This principle is regulated by PBU14/2007 (clause 34).

Depreciation accumulated on account 05 is subject to simultaneous write-off (unless, of course, this account was used by the enterprise to accumulate reimbursed depreciation).

Disposal and, accordingly, write-off of intangible assets can be carried out by the right holder organization for the following possible reasons:

• the conducted audit established the fact of shortage (absence) of the property object;
• the object is included in the authorized/share fund of another organization as a contribution;
• Intangible assets are made by the right holder enterprise as a contribution under a joint activity agreement;
• the asset is transferred to another entity under an exchange/donation agreement;
• obsolescence of an intangible asset made it impossible to continue to use it for its intended purpose;
• the rights registered by the organization in relation to intangible assets are transferred to third parties on the basis of succession or imposed penalty;
• the asset is transferred to another person due to the alienation of the relevant right;
• exclusive rights to the object ceased to operate due to the expiration of the appointed period;
• other circumstances, reasons, grounds.

Read also about the sale of intangible assets in this article.

Documents in case of wear, expiration of useful life

If the regulated useful life of intangible assets has expired, its write-off will be accompanied by the execution of proper primary documentation, which is provided for by the requirements of Federal Law-402, current as of 06.12.2011 (Article 9).

The management of the enterprise has the right to independently develop and approve the forms (forms) of the relevant papers (acts). These documents must contain all the necessary details, including the reason (grounds) for leaving.

So, if an intangible asset is written off by an enterprise due to the expiration of its useful life, the following papers must be drawn up:

• NMA-1 registration card. It records information about the write-off of an asset from the balance sheet of the organization. If a corresponding entry is made, the depreciation of this object ceases to be accrued from the month following the month of write-off.
• An order from the management of the organization on the need to write off the object. The document must indicate the basis (reason) for such an action.
• Act of write-off of intangible assets. Based on this document, an entry is made in the accounting card of the asset being written off. Like the above order, this paper is signed by the head and contains information about the reason why the intangible asset is written off.

If the procedure was carried out by a special commission, the composition of which is approved in advance by the head of the enterprise, this act must be signed by all its participants.

sample order

An order to write off an intangible asset is drawn up by the head of the right holder organization and contains the following details:

• Name of the order, its registration number, date of issue.
• Subjects - employees of the organization - responsible for the implementation of this order. Each entity participating in the procedure is assigned specific tasks with deadlines.
• Name of intangible asset, its brief description, inventory number.
• The reason for decommissioning the object.
• Documentary basis (if any). As an option, the decision (conclusion) of a special commission.
• The order is signed directly by the head of the organization, as well as by all responsible entities confirming familiarization with this act.

Download a sample order to write off intangible assets - word.

An example of an act

It is possible to write off intangible assets and enter the necessary information into its registration card in the organization on the basis of the relevant act containing the following information:

• Name of the act, its registration number, date of compilation.
• The name of the legal entity that writes off the asset.
• Structural subdivision of the enterprise using the object.
• Correspondence of accounting accounts upon write-off.
• The name of the written-off object of intangible assets.
• Primary cost (according to the balance sheet).
• Accumulated depreciation.
• Inventory number.
• Information about the special commission that audited the decommissioned object, and its powers.
• Date of admission to the organization.
• The reason (basis) for writing off (for example, obsolescence).
• Conclusion (decision) of a special commission.
• List of legal documents.
• Full name and signatures of the members of the commission (including the head).
• Data on the financial result (loss) following the write-off.
• Mention of the closing of the inventory card.

Download a sample act on the write-off of intangible assets - word.

Accounting for intangible assets (incoming)

Purchase of intangible assets (postings, example):

In accounting, there is an account 04 "Intangible assets". Also, as in the case of fixed assets, intangible assets are accounted for at their original cost plus additional costs minus VAT. Moreover, since 2008 VAT is not subject to the exclusive right to inventions, industrial designs, computer programs, databases, topologies of integrated circuits, know-how, utility models. Additional costs may include payment of various fees, payment for the services of any intermediary organizations, payment for consulting and information services, and other costs associated with the purchase of an intangible asset.

Primary documents for accounting for intangible assets - Accounting card of intangible assets-1, an act of acceptance of the transfer is also drawn up.

Transactions when purchasing an intangible asset:

Let's take an example of how accounting is kept when buying an intangible asset, and what entries are made.

An example of buying an intangible asset:

Firm 1 bought from firm 2 the exclusive right to an invention. The patent assignment agreement was registered with Rospatent with a fee of 2,400 rubles. The cost of the patent is 59,000 rubles.

In this example, accounting will have the following entries:

Creation of an intangible asset (postings, example):

Intangible assets are considered to be created if they are received:

1. As a result of the performance of official duties or on a specific assignment of the employer
2. From third parties under the concluded contract for the creation.

Postings for the creation of intangible assets are similar to the previous case of purchase, only additional costs can also include payment for the services of employees of third-party organizations involved in the creation of intangible assets, remuneration of in-house specialists involved in the creation of intangible assets, deductions for social needs, costs for the maintenance of research equipment and other fixed assets involved in the creation of intangible assets, as well as the accrued depreciation on them.

The research bureau developed a new engine, conducted successful tests, and an application for a patent was sent to Rospatent.

• wages of workers 30,000;
• insurance premiums 7800;
• material costs 10000;
• state duty 2000;
• examination fee 990.

Patent received for 5 years.

The wiring in this example:

In this example, it is worth noting that this is how the accounting for intangible assets will look like in accounting, in tax accounting in accordance with Art. 257 of the Tax Code, taxes paid are not taken into account as costs when creating intangible assets.

We will deal with tax accounting in more detail later in the corresponding section of this site.

Receipt of an intangible asset in the form of a contribution to the authorized capital (transactions):

If intangible assets enter the enterprise as a contribution to the authorized capital, then we recall account 75 and draw up the following entries:

D08 K75 - The cost of intangible assets is taken into account,

D04 K08 - intangible assets accepted for accounting.

Disposal of intangible assets upon write-off

If an intangible asset is damaged, its useful life has expired, intangible assets have lost their functions and properties and are not suitable for further use for their intended purpose, then it must be written off the register.

A special commission assesses the condition of the asset, which makes a decision on the need to write off the object. At the same time, he draws up an order stating which particular intangible asset is to be written off and for what reason. The write-off process itself takes place on the basis of the write-off act. When an object is deregistered, a note about this is made in the accounting card for intangible assets of NMA-1.

When intangible assets are disposed of, the residual value must be written off as expenses of the enterprise. The residual value is determined as the difference between the original cost and the depreciation accrued on the write-off date.

If a separate account 05 was used to calculate the depreciation of intangible assets, then the accrued depreciation is written off by posting D05 K04. After that, the residual value identified on account 04 is written off to other expenses by posting D91 / 2 K04.

If a separate account was not opened for depreciation, and depreciation deductions were debited directly from the credit of account 04, then you just need to determine the residual value of the asset and write it off as expenses of the enterprise.

After that, you can determine the financial result from the write-off (loss).

Postings when writing off an intangible asset:

Transfer of an intangible asset for a fee

The sale of intangible assets is also formalized through 91 accounts (unless, of course, the sale of intangible assets is not a common activity of the enterprise). The debit of account 91 collects all costs associated with the sale, the credit - the proceeds from the sale.

When transferring the exclusive right to an asset to another legal or natural person, the residual value of the asset must be written off in the same way to the debit of account 91. Postings are made similar to depreciation write-offs.

A number of intangible assets are exempt from VAT: the exclusive right to programs, databases, inventions, designs and models, to the topology of integrated circuits and know-how.

If the asset does not belong to the list of objects that are exempt from value added tax, then the sale price (revenue) must include VAT. The selling organization must pay this VAT to the budget. The entry for the accrual of VAT payable from the intangible asset being sold has the form: D91.2 K68.VAT. The proceeds from the sale are reflected in posting D62 K91.1.

Based on the results of the sale, a financial result is displayed, which is reflected on account 99 (loss on debit or profit on credit).

Transactions when selling intangible assets:

Free transfer of an intangible asset to another person

When donating, the object is transferred at the residual value, which is formed on credit account 04.

A free transfer is equivalent to a sale, therefore, to complete this procedure, you also need to use account 91 and do not forget to charge VAT on the market value of this intangible asset.

The debit of the account collects all expenses for the gratuitous transfer of the asset: residual value, VAT, other expenses. The sum of all these expenses will be the loss from donation, which is reflected in posting D99 K91.9.

Transactions when donating intangible assets

Entering into the Criminal Code of another organization

Here the account is reflected in a slightly different way. In this case, the contribution of intangible assets to the authorized capital is considered a financial investment with the aim of making a profit in the form of dividends. Therefore, here you need to use account 58. The entry reflecting the enterprise's debt on the contribution to the Criminal Code has the form D58 K76.

The asset is transferred at residual value. From credit account 04, the residual value of intangible assets is debited to account 76. The wiring looks like D76 K04.

Postings when entering intangible assets into the Criminal Code of another enterprise:

Typical postings for the disposal of intangible assets

ACCOUNTING FOR THE DISPOSAL OF INTANGIBLE ASSETS

The cost of intangible assets that are retired or are not able to bring economic benefits in the future are subject to write-off from accounting. Intangible assets may be disposed of for the following reasons:

Termination of the organization's right to the result of intellectual activity or means of individualization;

Transfer (sale) under an agreement on the alienation of the exclusive right to the result of intellectual property;

Transfer of the exclusive right to other persons without the Agreement;

Termination of use due to obsolescence;

Transfer under an exchange, donation agreement;

Making a contribution to the account under a joint activity agreement;

Transfer as a contribution to the authorized capital of other organizations;

upon transfer to trust management, etc.
The basis for write-off are acts of transfer,

write-off acts, minutes of the meeting of shareholders, etc.

Accounting for the disposal of intangible assets is kept on the active-passive account 91 “Other income and expenses”.

The debit of account 91 reflects:

1. Residual value of intangible assets:

D-t 91 K-t04;

2. Costs associated with the disposal of intangible assets:

Dt 91 Kt 70, 71, 69;

3. The amount of VAT on sold intangible assets:

Dt 91 Kt 68.

On the credit of account 91, they reflect the proceeds from the sale of intangible assets at contractual prices, including VAT: Dt 62 Kt 91.

On account 91 “Other income and expenses”, the financial result from the write-off of intangible assets is determined by comparing turnovers. If the debit turnover is greater than the credit turnover (debit balance), we get a loss that will be written off to account 99 “Profit and Loss” by posting: D-t99K-t91.

If the loan turnover is greater than the debit turnover (credit balance), we get a profit that will be debited to account 99 by posting:

Dt 91 Kt 99.

For any reason of disposal, the write-off of an intangible asset from the balance sheet is reflected in the following entries:

Write-off of accrued depreciation - Dt 05 Kt 04,

Write-off of the residual value - Dt 91 Kt 04.

Questions for self-control

1. What are intangible assets?

2. Valuation of intangible assets.

3. Methods for calculating the depreciation of intangible assets.

4. At what cost is intangible assets taken into account in accounting?

5. At what cost is NML reflected in the balance sheet?

6. How to determine the depreciation rate of NML?

7. What intangible assets are not subject to depreciation?

8. How is the receipt of intangible assets reflected in accounting?

9. What accounting entries reflect the disposal of intangible assets?

10. On what account do they keep records of the disposal of intangible assets and determine the financial result from the disposal?

Any accountant periodically faces the implementation of such an important operation as the write-off of intangible assets. In addition, it should be borne in mind that assets can be written off for various reasons: if it was sold, liquidated or transferred to a gratuitous transfer. This article will help you quickly and easily implement this task, giving examples of postings and brief characteristics of the operation.

Occurs in accordance with the Accounting Regulations 14/2007. This document indicates cases when intangible assets can be written off, namely:

1. As a result of depreciation, when their value is written off as expenses;
2. Loss of profitable qualities, as well as unsuitability for future operation;
3. Obsolescence;
4. Transfer of the right to use an intangible asset to other persons, companies or organizations;
5. Transfer of an asset in the form of intellectual property to the authorized capital of any enterprises;
6. When finding a shortage based on the results of the produced;
7. Other cases, if there is a need for it.

Postings when writing off an intangible asset

How to reflect the write-off of intangible assets in the postings upon liquidation

Reflection in HMA gratuitous transfer transactions

22.08.2019

When y ends regulated, this asset is subject to write-off. The general principles of such a procedure are provided for in RAS 14/2007, namely, Chapter V of this regulatory act.

The removal of an intangible asset from the balance sheet is documented and accompanied by the fixing of the necessary correspondence in accounting.

Reasons for removing intangible assets from the balance sheet

This principle is regulated by PBU14/2007 (clause 34).

Accumulated on account 05 is subject to simultaneous write-off (unless, of course, this account was used by the enterprise to accumulate reimbursed depreciation).

Documents in case of wear, expiration of useful life

If the regulated useful life of intangible assets has expired, its write-off will be accompanied by the execution of proper primary documentation, which is provided for by the requirements of Federal Law-402, current as of 06.12.2011 (Article 9).

The management of the enterprise has the right to independently develop and approve the forms (forms) of the relevant papers (acts). These documents must contain all the necessary details, including the reason (grounds) for leaving.

So, if an intangible asset is written off by an enterprise due to the expiration of its useful life, the following papers must be drawn up:

• . It records information about the write-off of an asset from the balance sheet of the organization. If a corresponding entry is made, this object ceases to be accrued from the month following the month of debiting.
• An order from the management of the organization on the need to write off the object. The document must indicate the basis (reason) for such an action.
• Act of write-off of intangible assets. Based on this document, an entry is made in the accounting card of the asset being written off. Like the above order, this paper is signed by the head and contains information about the reason why the intangible asset is written off.

If the procedure was carried out by a special commission, the composition of which is approved in advance by the head of the enterprise, this act must be signed by all its participants.

sample order

An order to write off an intangible asset is drawn up by the head of the right holder organization and contains the following details:

• Name of the order, its registration number, date of issue.
• Subjects - employees of the organization - responsible for the implementation of this order. Each entity participating in the procedure is assigned specific tasks with deadlines.
• Name of intangible asset, its brief description, inventory number.
• The reason for decommissioning the object.
• Documentary basis (if any). As an option, the decision (conclusion) of a special commission.
• The order is signed directly by the head of the organization, as well as by all responsible entities confirming familiarization with this act.

Download a sample order to write off intangible assets - word.

An example of an act

It is possible to write off intangible assets and enter the necessary information into its registration card in the organization on the basis of the relevant act containing the following information:

• Name of the act, its registration number, date of compilation.
• The name of the legal entity that writes off the asset.
• Structural subdivision of the enterprise using the object.
• Correspondence of accounting accounts upon write-off.
• The name of the written-off object of intangible assets.
• Primary cost (according to the balance sheet).
• Accumulated depreciation.
• Inventory number.
• Information about the special commission that audited the decommissioned object, and its powers.
• Date of admission to the organization.
• The reason (basis) for writing off (for example, obsolescence).
• Conclusion (decision) of a special commission.
• List of legal documents.
• Full name and signatures of the members of the commission (including the head).
• Data on the financial result (loss) following the write-off.
• Mention of the closing of the inventory card.

Download a sample act on the write-off of intangible assets - word.

Accounting and postings

The financial result of the procedure for removing an intangible asset from the balance sheet is reflected in account 91. Operations are recorded in accounting in the period in which income / expenses occur.

Typical correspondence is shown in the table.

Depreciation

If account 05 was used to accumulate depreciation (depreciation), the amount of accumulated depreciation will be written off by correspondence of debit 05 with credit 04, and the residual value of the intangible asset determined by account 04 is transferred to other costs by correspondence of debit 91/2 with credit 04.

If, however, account 05 was not opened to accumulate depreciation, depreciation was debited directly from loan 04. In this case, the residual value is identified and transferred to other costs.

How to write off when closing an organization?

Cash and other assets of a closing (liquidated) organization remaining after the repayment of all creditor obligations are legally transferred to its founders (participants).

This provision is provided for by the Civil Code of the Russian Federation.

Since the objects of intangible assets, the right holder of which is the organization being liquidated, cannot be used in its business processes for longer than the life of the organization itself, such assets are debited from the balance sheet when the enterprise is closed.

The following correspondence is made:

• The original cost is written off.
• Accumulated depreciation is written off.
• The financial result from the write-off is reflected.

conclusions

Thus, the write-off of intangible assets is carried out in the accounting of the organization according to regulated rules. This concerns the indication of the reason (reason) for the write-off, as well as the documentation and accounting of the corresponding procedure.

An order of management and a documentary act on the write-off of the asset are drawn up, containing the necessary information (details). The necessary information is entered into the accounting (inventory) card of intangible assets.