DEPRECIATION ON INTANGIBLE ASSET IN COMPANIES ACT

[DEVENDER KUMAR]

Dear Members,

                      I have a query that what is the rate of  depreciation on intangible assets i.e. trade marks, patents , distribution right etc. pursuant to the companies act, pls immediately reply me.

 

 

 

 

Thanks &Regards

D.K. Suhag

Company Secretary 

 

             

[CS Yogish Bhat]

Dear Member, 

The depreciation on intangibles has to be provided in accordance with the AS-6 

Usually intangibles are depreciated over the life of asset on straight line basis.

Contrary views invited.

Regards,

Yogish Bhat

             

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[CS Yogish Bhat]

Dear Member,

Kindly ignore the earlier mail. 

Intangibles have to be amortized as per AS 26.

A variety of amortisation methods can be used to allocate the depreciable amount of an asset on a systematic basis over its useful life. These methods include the straight-line method, the diminishing balance method and the unit of production method. The method used for an asset is selected based on the expected pattern of consumption of economic benefits and is consistently applied from period to period, unless there is a change in the expected pattern of consumption of economic benefits to be derived from that asset. There will rarely, if ever, be persuasive evidence to support an amortisation method for intangible assets that results in a lower amount of accumulated amortisation than under the straight-line method.

Contrary views invited.

Regards,

Yogish Bhat

[DEVENDER KUMAR]

thanks very much