Because intangible assets are capital expenditures. Intangible assets are capital expenditures, and their benefit period will not be very short in general, and their value cannot be devalued too pessimistically and rapidly.

if the value of intangible assets is represented by a symbolic amount, although the possible inflated problem is solved, at the same time, it is too cautious, resulting in the inflated asset value, which is neither in line with the objective principle of accounting nor in violation of the importance principle of accounting.

The method of keeping its value in the account without amortization of intangible assets does have the risk of inflating assets, and the value lost due to the use of intangible assets cannot be reasonably collected into expenses, resulting in false operating costs and not meeting the requirements of accounting matching principle.

Extended information:

An enterprise should amortize intangible assets from the time when the intangible assets are available for use until they are no longer recognized as intangible assets.

the amortization method of intangible assets chosen by an enterprise should reflect the expected realization mode of economic benefits related to the intangible assets. If the expected realization mode cannot be reliably determined, it shall be amortized by the straight-line method.

the amortization amount of intangible assets should generally be included in the current profits and losses (management expenses, other business costs, etc.). If the economic benefits contained in an intangible asset are realized through the products or other assets produced, the amortization amount shall be included in the cost of the relevant assets.

an enterprise shall review the service life and amortization method of intangible assets with limited service life at least at the end of each year. If the service life and amortization method of intangible assets are different from those previously estimated, the amortization period and amortization method shall be changed.

policy provisions

1. Article 67 of the Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China stipulates that the amortization period of intangible assets shall not be less than 1 years. As an investment or transferee of intangible assets, if the service life is stipulated in relevant laws or contracts, it can be amortized in installments according to the stipulated or agreed service life.

2. The expenses of outsourcing goodwill are allowed to be deducted when the enterprise is transferred or liquidated as a whole.

3. According to the provisions of Caishui [28] No.1 document, enterprises and institutions that purchase software that meet the confirmation conditions of fixed assets or intangible assets can be accounted for according to fixed assets or intangible assets. With the approval of the competent tax authorities, the depreciation or amortization period can be appropriately shortened, with a minimum of 2 years.

Reference: Baidu Encyclopedia-Amortization of Intangible Assets.