Intangible Assets, Patents & Deferred Expenses

Intangible Assets

Patents
Patents represent the rights granted to a person or legal entity, at a national or international level, on an exclusive basis, for exploitation or sale for a specified number of years. (In our country, 15 years).

Trademarks

Trademarks
These are used to maintain the distinctive aspects of a company's products. They give their owners exclusive rights to the use, operation, or sale of the brand.

Start-up Costs, Organizational Development and Implementation

Start-up costs, organizational development and implementation
The term capital gain is applied to indicate the excess or difference between the amount paid in the purchase of a company and the independent value of its tangible and intangible assets.

Deferred Expenses

Deferred

Constitution Deferred Expenses

Constitution deferred expenses
The constitution and legalization of a company usually incur a series of disbursements which, if they are significant in relation to the income of the company, should not be charged entirely to the first period but deferred to be spread over several future periods. The costs of incorporation are made with the intention that the cause that motivated the creation of the company generates revenue.

Development Costs

Development costs
Before the company starts operations that generate income, it needs a period called pre-operative, during which a variety of expenses will be incurred. At this stage, it seems illogical to show losses when the company has not yet started its operational phase. Therefore, it is considered that the revenue that could be obtained in the future could be associated with preoperative expenses incurred to obtain it. Therefore, preoperative development expenditure can be deferred.

Improvements on Leased Property

Improvements on leased property
When a company leases land, buildings, shops, etc., it is normal to adapt them according to its needs, which will cause a series of expenditures that benefit future periods. Moreover, in some cases, to obtain the lease—either because of the location of the property you want to rent or for other reasons—a certain amount is paid in advance. These costs should not be charged to the period when made; they will be deferred, except when the amount is so insignificant that immediate charging is warranted.

Accounts

Accounts
As we said in the first part of the work, order accounts are accounts that control operations that do not alter the nature of the property, rights, or obligations of an entity. Among the most common are:

• Debtor Accounts (Deudoras)

  Bank account for recovery money
  It is the account that represents the amount of cash or money orders that are lodged in the banks.

• Goods on Consignment

  Goods on consignment
  These are goods that we can obtain at no cost; then, to sell them, we incur obligations to the supplier.

• Creditors

  Money for recovery from banks
  This account represents the effects or money sent to the bank to effect its recovery but that have not yet been recovered.