Book keeping Help

[rooboy_88]

Im currently doing an assignment for accounting on whether the cost of a new logo would be deemed an asset or an expense.

something along the lines of norths new logo in season 2007.

 

[FrediKanoute]

Is it in accordance with the new accoutning standards? The AIASB's? If so then you need to look to the standard on Intangible assets and that should help.

 

[smooking39]

I'm doing unit 3 accounting currently and i would assume its a expense. You cant sell it. But that is just an assumption

 

[Qsaint]

Im currently doing an assignment for accounting on whether the cost of a new logo would be deemed an asset or an expense.

something along the lines of norths new logo in season 2007.

Been a while but technically IRC its an Asset. But if it doesn't cost a lot you can expense it. There is also the difference between a Logo that has intrinsic value and one that does not. EG Macdonalds Arches vs Hawthorn book keeping services logo. Any way the answers in the Accounting standards

 

[rooboy_88]

The question is addressed in regards to a new business and they spent $350,000 on a new logo and we have to determine if it is an asset or an expense.

In terms of an asset it will give us future economic benefit, control and reliable measurement but in accordance with the recognition criteria, it isnt likely that we will receive the economic benefit for the new logo.

Because it doesnt satisfy all the criteria by definition of an asset, I would feel that you would have to expense it.

If it was like a Mcdonalds than you would say it is an asset but being a new business, you wont know if youll get the economic benefit because of a logo.

Thanks so far for your help lads really appreciate it.

 

[FrediKanoute]

The question is addressed in regards to a new business and they spent $350,000 on a new logo and we have to determine if it is an asset or an expense.

In terms of an asset it will give us future economic benefit, control and reliable measurement but in accordance with the recognition criteria, it isnt likely that we will receive the economic benefit for the new logo.

Because it doesnt satisfy all the criteria by definition of an asset, I would feel that you would have to expense it.

If it was like a Mcdonalds than you would say it is an asset but being a new business, you wont know if youll get the economic benefit because of a logo.

Thanks so far for your help lads really appreciate it.

The issue is the reliable measurement criteria. The problem with logo's is that it is difficult to reliably measure them at anything other than cost and hence difficult to classify them as an asset. I think the new standard on intangibles though does allow them to be recognised as an asset, but in doing so it is necessary to test them every year for impairment, and the amount of impairment has to be written off against profit (ie expensed)