Accounting Entries for intangibles Assets and R&D Expenditure

Accounting for Intangibles

Intangible assets are assets, other than financial assets, that have utility and value but lack physical substance. Examples include patents, copyrights, trade names, customer lists, royalty agreements, databases, and computer software. Intangible assets can be classified as identifiable, for example, trademarks, or unidentifiable, for example, goodwill. Another way to classify intangible assets is based on how they are acquired. They can be internally developed or acquired from external sources. Intangibles acquired externally can be further categorized depending on whether they are acquired in a business combination or as a separate asset or together with other assets that do not constitute a business. Intangible assets acquired in a business combination may be recognized as assets separate from goodwill or as part of goodwill, depending on whether the intangible assets.

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Accounting for Intangible Assets and Types of R&D Expenditure

Architect Software ..Dr.
           Bank/Payables..Cr.
(payment made for purchase of software for engineers)

Amortization of Architect Software .. Dr.
           Accumulated Amortization.. Cr.
(Recording of amortization of software based on useful life/license at year end)