![]() Identifiable assets includes tangible as well as intangible assets such as trade marks and customer lists. Goodwill is the amount by which the price paid for a business exceeds the fair value of the identifiable net assets acquired. For that reason in some countries the distinct between service and goods is not made and the marks are classified as trade marks.įor example a parcel delivery service does not offer physical goods for sale but may have a service mark identifying and distinguishing its service from others on its promotional material, staff uniforms or delivery vehicles. Generally the only difference between a service mark and a trade mark, is that a service mark identifies and distinguishes the supplier of a service and a trade mark identifies and distinguishes the supplier of goods. In the US, a service mark is a word, phrase, symbol or design, that identifies and distinguishes the source of a service rather than goods. The intangible assets journal entry to reflect this impairment is as follows: Impairment loss = Carrying value - Recoverable amount For example, if a business has a trademark which is carried in the balance sheet at 50,000, and an impairment review shows that the recoverable amount is only 40,000, then the impairment calculation as follows. The symbol indicating a registered trademark is the letter “R” surrounded by a circle ®.Īs they do not expire, a trademark is an example of an intangible asset with an indefinite life. Registering a trade mark gives the business the exclusive right to use it, and another business using the same or similar trade mark is said to have infringed the trademark and could be sued for damages. A trade mark is renewable every 10 years and unless the business has decided it has a fixed useful life, it can be considered to have an indefinite life. The purpose of the trade mark is to legally distinguish the products of one business from another. Impairment loss = Carrying value – Recoverable amount Trade MarkĪ trade mark is a distinctive logo, word, symbol, signature or phrase usually seen on a product, packaging, or advertisements showing that there is a trade connection between the product and a business. ![]()
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