Depends on whether the intangible asset has finite useful life or indefinite life.
Now, as per Ind AS 38, an intangible asset with a finite useful life shall be depreciated on a systematic basis over its useful life.
An intangible asset with an indefinite useful life (example below) shall not be amortised, but is required to be checked for impairment annually,or whenever there is an indication for impairment as per Ind As 36.
Indefinite life comes under various circumstances , like when a company takesover another company, it may pay an amount in excess of the net assets of the acquiree company, which will be recorded as Goodwill in the books of acquirer company.
This goodwill is an intangible asset with indefinite life, and cannot be amortised annually, but can only be checked for impairment ,till the acquired company is sold out or goodwill is fully impaired.
| Subscribe To Our Free Newsletter |
