intangible assets purchased by enterprises generally include patent rights, trademark rights, etc. For intangible assets added in the current month, they are amortized in the current month. What methods do accountants use to evaluate intangible assets?

intangible assets evaluation methods

There are three methods to calculate intangible assets: market method, income method and cost method. Intangible assets evaluation is an act of confirming, valuing and reporting trademarks according to specific purposes, following fair and statutory standards and regulations, and using appropriate methods to provide value scales for asset business. In practice, the evaluation of intangible assets is generally divided into three types: market method, income method and cost method. Market value method, which determines the value of intangible assets according to market transactions. Income method, which calculates the value of intangible assets according to their economic benefits or the present value of future cash flows. Cost method, which is to calculate the cost of replacing or rebuilding a certain type of intangible assets.

definition of intangible assets

intangible assets refer to identifiable non-monetary assets that have no physical form and are owned or controlled by enterprises.

Compared with other assets, intangible assets have three main characteristics:

1. They have no physical form

2. They are recognizable

They can be separated or divided from enterprises and used for sale, transfer, licensing, lease or exchange alone or together with related contracts, assets or liabilities. Or from contractual rights or other legal rights.

3. Non-monetary long-term assets

Intangible assets are non-monetary assets and can bring economic benefits to enterprises in multiple accounting periods. The service life of intangible assets is more than one year, and its value will be gradually amortized during each benefit period.

accounting entries for intangible assets

accounting entries for purchasing intangible assets:

borrowing: intangible assets

taxes payable-value-added tax payable-input tax

lending: bank deposits

accounting entries for amortization of intangible assets:

borrowing: management expenses (amortization of intangible assets for self-use)

other business costs (amortization of intangible assets for lease)