Corresponding Policy: See ‘Accounting for Intangible Assets-Intro’ policy.
Corresponding Forms: N/A
Process: Figuring out the Amortization Policy by Account Code on Intangible Assets
Capital Asset | Asset Type | Amortized? (Yes/No) | Amortization Frequency | Amortization Expense Account Code | Accumulated Amortization Account Code | Treatment of First Year Amortiza- |
|---|---|---|---|---|---|---|
A8210 - Easements | UE | Note 1 | Monthly | 80711 | A8711 | Note 2 |
A8221 - Computer Software | US | Note 1 | Monthly | 80721 | A8721 | Note 2 |
A8231 - Water Rights | UW | Note 1 | Monthly | 80731 | A8731 | Note 2 |
A8241 - Timber Rights | UT | Note 1 | Monthly | 80741 | A8741 | Note 2 |
A8251 - Patents & Copyrights | UP | Note 1 | Monthly | 80751 | A8751 | Note 2 |
A8261 – Trademarks | UK | Note 1 | Monthly | 80761 | A8761 | Note 2 |
A8271 - Other Intangible Assets | UO | Note 1 | Monthly | 80771 | A8771 | Note 2 |
A8222 - In Development (Computer Software) | US | No | ||||
A8252 - In Development (Patents | UP | No | ||||
A8262 - In Development (Trademarks) | UK | No | ||||
A8272 - In Development (Other Intangibles) | UO | No |
Notes:
Intangible assets are amortized unless they have an indefinite service life.
Proportional - Amortization begins in the month the intangible asset is acquired and ready for use (e.g., "substantially complete"), and removed from "In Development" status in Banner Fixed Assets. If the maintenance in Banner Fixed Assets is performed late, "catch-up" amortization would need to be performed back to the month that the property was completed or "substantially completed." Additional capitalizable costs to completed or "substantially completed" records will be added at the end of the fiscal year, with amortization on the additional capitalizable costs to begin on July 1 of subsequent year. In Development amounts must be updated in Banner Fixed Assets at least at year-end, but more frequently is desirable.
Amortization pertaining to capital assets of proprietary funds is charged to auxiliary enterprise or service department funds. Amortization pertaining to other funds is charged to the investment-in-plant fund.